Wells Fargo Announces Community Reinvestment Act Rating
March 28 2017 - 1:00PM
Business Wire
Rating lowered despite an overall “Outstanding”
Performance Exam, demonstrated commitment to low- and
moderate-income communities
Wells Fargo & Company (NYSE: WFC) today announced the
results of its most recent Community Reinvestment Act (CRA)
Performance Evaluation, which covers the years 2009-2012. Despite
citing Wells Fargo Bank, N.A.’s overall “Outstanding” performance
on the exam’s components, the Office of the Comptroller of the
Currency (OCC) downgraded the bank’s final rating to “Needs to
Improve” due to previously issued regulatory consent orders. A copy
of the OCC’s entire report can be found on Wells Fargo’s
website.
"We are disappointed with this rating given Wells Fargo's strong
track record of lending to, investing in and providing service to
low- and moderate-income communities. However, we are committed to
addressing the OCC’s concerns because restoring trust in Wells
Fargo and building a better bank for our customers and our
communities is our top priority,” said Tim Sloan, Wells Fargo’s CEO
and president. “Wells Fargo is deeply committed to economic growth,
sustainable homeownership and neighborhood stability in low- and
moderate-income communities and will continue to invest above and
beyond what is required by CRA.”
Established by Congress in 1977, the CRA encourages banks to
meet the credit needs of all segments of the communities where and
with whom they do business, including low- and moderate-income
(LMI) populations and individuals. This is the first time since
1994, when exam results began being publicly disclosed, that Wells
Fargo Bank, N.A.’s final rating has been anything other than the
highest overall CRA rating of “Outstanding.” On the performance
aspects of this exam, the OCC rated Wells Fargo’s overall CRA
performance as “Outstanding.” On the individual components of the
exam, Wells Fargo received an “Outstanding” on the Lending Test
(which makes up 50 percent of the exam), an “Outstanding” on the
Investment Test, and a “High Satisfactory” on the Service Test.
Wells Fargo’s efforts were also rated a minimum of “Satisfactory”
across all 54 states and multi-state metropolitan areas reviewed by
the OCC for the timeframe concluding in 2012.
"With more than four years having passed since the end of our
last CRA evaluation period, Wells Fargo intends to ask the OCC to
accelerate the timing of its next exam so that we may continue to
serve most effectively the low- and moderate-income communities in
which we operate,” Sloan continued.
Despite their decision to downgrade the final rating on “non-CRA
performance factors,” the OCC in its Performance Evaluation cited
Wells Fargo’s work on CRA-related activities during the exam
period, including lending levels that reflected “excellent
responsiveness to the credit needs in the majority” of the LMI
assessment areas. It also found that Wells Fargo demonstrated
leadership in providing community development services, including
efforts by the bank's team members to provide financial education
seminars and participate on boards for organizations that serve LMI
populations.
The OCC noted in particular that community contacts indicated
that Wells Fargo was particularly responsive to the needs of those
in LMI areas, citing a number of examples, including:
- A $14.75 million investment in Orlando,
Florida, that allowed a food bank to take in more than 3 million
additional pounds of food annually;
- A $450 million loan to refinance a
1,689-unit Section 8 affordable housing complex in New York City;
and,
- Having approximately 40 percent of
Wells Fargo’s retail bank branches located within or directly
bordering LMI communities.
Since the exam period, Wells Fargo has continued a deep and
broad commitment to all communities it serves that exceeds CRA
requirements, originating more home loans than any other bank in
America over the last six years to African-Americans, Asians,
Hispanics, Native Americans, LMI borrowers, and residents of LMI
neighborhoods. For example, Wells Fargo recently announced a $60
billion lending commitment with a goal of creating at least 250,000
new African American homeowners by 2027, the second such initiative
the bank has announced to advance homeownership for minorities,
first-time homebuyers and LMI customers. In 2015, Wells Fargo
announced a $125 billion lending goal for Hispanic homeowners as
part of the National Association of Hispanic Real Estate
Professionals’ Hispanic Wealth Project.
In addition to home lending, Wells Fargo is a leader in Equity
Equivalent Investments, managing a $250 million portfolio that
provides a significant source of capital for many community
development organizations. Wells Fargo also launched the Diverse
Community Capital program, a three-year, $75 million initiative
that helps Community Development Financial Institutions provide
capital, technical assistance, business planning, and other
resources to diverse-owned businesses. In addition, Wells Fargo
made $21 billion in small business loans of less than $1 million
each in 2015.
Wells Fargo’s commitment to LMI communities also has included
philanthropy, such as:
- Donating more than $1.1 billion since
2013 to nonprofits, educational programs and schools, including
nearly $578 million for diverse communities.
- Providing nearly $440 million in grants
during the same time period to charitable organizations that focus
on community development in distressed communities, covering causes
such as affordable housing, homeownership counseling, financial
education, workforce development and job creation.
Wells Fargo also plans to make community investments of more
than $100 million by 2020 to advance causes such as social
inclusion, and development of women and diverse leaders as part of
its new Corporate Social Responsibility (CSR) goals. More
information on Wells Fargo’s most recent CSR performance and its
commitment to community investment can be found at Wells Fargo’s
Stories site or in its 2016 annual report.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified,
community-based financial services company with $1.9 trillion in
assets. Founded in 1852 and headquartered in San Francisco, Wells
Fargo provides banking, insurance, investments, mortgage, and
consumer and commercial finance through more than 8,600 locations,
13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and
has offices in 42 countries and territories to support customers
who conduct business in the global economy. With approximately
269,000 team members, Wells Fargo serves one in three households in
the United States. Wells Fargo & Company was ranked No. 27 on
Fortune’s 2016 rankings of America’s largest corporations. Wells
Fargo’s vision is to satisfy our customers’ financial needs and
help them succeed financially.
Cautionary Statement About Forward-Looking Statements
This news release contains forward-looking statements about our
future financial performance and business. Because forward-looking
statements are based on our current expectations and assumptions
regarding the future, they are subject to inherent risks and
uncertainties. Do not unduly rely on forward-looking statements as
actual results could differ materially from expectations.
Forward-looking statements speak only as of the date made, and we
do not undertake to update them to reflect changes or events that
occur after that date. For information about factors that could
cause actual results to differ materially from our expectations,
refer to our reports filed with the Securities and Exchange
Commission, including the discussion under “Risk Factors” in our
Annual Report on Form 10-K for the year ended December 31, 2016 as
filed with the Securities and Exchange Commission and available on
its website at www.sec.gov.
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version on businesswire.com: http://www.businesswire.com/news/home/20170328006184/en/
Wells Fargo & CompanyMediaJennifer Dunn,
202-303-2966Jennifer.g.dunn@wellsfargo.com@JenniferDunnWFInvestorsJim
Rowe, 415-396-8216jim.rowe@wellsfargo.com
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