Wells Fargo & Co

Stock Symbols
NYSE
:
WFC
company headquarters
USA
ISSUES

A US-based multinational banking and financial services company. It has been one of the main financial backers of private prison companies CoreCivic and GEO Group. In 2019, it announced that it would exit its relationships with these companies. As of 2023, CoreCivic's and GEO Group's credit agreements do not publicly disclose the financial institutions involved.

Wells Fargo & Co is a US-based multinational banking and financial services company headquartered in San Francisco. In 2022, the company served over 70 million customers across the U.S. and 34 other countries and generated approximately $73.8 billion in revenue. As of 2023, it is the sixteenth largest bank in the world based on total assets.

Past Financing of Private Prison Companies

Wells Fargo has been identified as one of several major financiers of private prison and immigrant detention companies, having provided revolving lines of credit, term loans, and bond underwriting services to CoreCivic and GEO Group. While it announced in 2019 that it would exit the private prison industry, it is unclear, as of 2023, whether it has upheld this commitment.

In 2019, GEO Group entered into an amended credit agreement, set to expire in 2024. This agreement effectively replaced the company's 2014 credit facility of the same amount, consisting of a $900 million revolving line of credit and a $792 million term loan. As part of a syndicate of banks, Wells Fargo served as a lender under the original agreement, contributing an undisclosed amount of money to the deal.

Wells Fargo also served as an underwriter for the following CoreCivic and GEO Group bond offerings:

  • September 2015: CoreCivic issued $250 million of bonds, with a maturity date of 2022. As part of a syndicate of banks, Wells Fargo underwrote $42.5 million worth—the largest portion—of these bonds.
  • October 2013: GEO Group issued $250 million of bonds, with a maturity date of 2022. Wells Fargo served as the representative of the initial purchasers of the bonds, facilitating the sale of the bonds to the buyers.
  • April 2013: CoreCivic issued two sets of bonds—one set totaling $325 million, with a maturity date of 2020, and another set totaling $350 million, with a maturity date of 2023. As part of a syndicate of banks, Wells Fargo underwrote both sets of bonds; however, SEC filings do not disclose the proportion of bonds underwritten by the bank.

Discerning the Company's Role in Current Credit Agreements

As of September 2023, Wells Fargo is or might still be involved in the following bond agreements—arranged prior to the bank's divestment announcement—with CoreCivic and GEO Group:

In August 2022, GEO Group completed an offer to exchange/purchase certain outstanding notes, revolving credit loans, and term loans from certain lenders. As part of this agreement, GEO Group exchanged its outstanding bonds due 2023, 2024, and 2026 for newly issued bonds due 2028. SEC filings do not disclose whether Wells Fargo is still involved in any of these agreements.

Involvement in Cop City

Wells Fargo has ties to the Atlanta Police Foundation (APF), the nonprofit arm of the Atlanta Police Department that, with the City of Atlanta, is constructing a militarized police training compound—'Cop City'—on protected forest land. As of 2023, Wells Fargo Lead Business Execution Consultant, Mitch Graul, serves on the APF's Board of Trustees.

Other Controversies

Wells Fargo is one of 17 banks that have funded the Dakota Access Pipeline (DAPL). The pipeline, constructed by Texas-based developer Energy Transfer Partners, cost approximately $7.5 billion to build. Stretching 1,172 miles through North Dakota, South Dakota, Illinois, and Iowa, the pipeline poses environmental threats and violates the Fort Laramie Treaty, which guarantees the Standing Rock Sioux Tribe's "undisturbed use" of reservation lands surrounding the location of the pipeline.

In 2016, Wells Fargo agreed to pay $185 million in fines after employees opened millions of bank and credit card accounts—without customers' consent—in an effort to hit sales targets and receive bonuses. Over 5,300 employees were fired as a result of the practice, and Wells Fargo issued some $5 million in refunds to its customers.

In 2014, Wells Fargo was sued for allegedly targeting Black and Latinx borrowers with predatory high-cost loans that pushed them into default and foreclosure. Two years prior, the company agreed to pay $175 million to settle allegations that it discriminated against Black and Latinx borrowers by steering them into subprime loans or inflated mortgage loans. The bank was also accused of deliberately allowing foreclosed homes in Black and Latinx neighborhoods to lapse into disrepair while maintaining bank-owned homes in predominantly white neighborhoods.

Economic Activism Highlights
  • On April 19, 2018, American Federation of Teachers President announced that the union would "cut ties" with Wells Fargo over the company's ties to the National Rifle Association (NRA). Wells Fargo manages approximately 20,000 AFT's members’ mortgages, but AFT will remove the bank from its list of approved lenders.
  • On December 13, 2017, Los Angeles City Council unanimously voted to approve the Request for Proposal for banking services contracts, which would disqualify the city from doing business with Wells Fargo because of its downgraded Federal Community Reinvestment Act Rating. Wells Fargo holds approximately $75 to $100 million of the City's operating funds.
  • On September 11, 2017, St. Peter's City Council voted to divest over $700,000 from Wells Fargo, due to the company's involvement in the Dakota Access Pipeline and fraudulent business practices.
  • On May 30, 2017, Berkeley City Council unanimously passed a plan to divest from Wells Fargo, citing the banks poor business practices, such as creating 2.5 million fraudulent accounts and financing the Dakota Access Pipeline. The contract is expected to end in May 2018.
  • On April 26, 2017, University of Wisconsin-Madison students passed a resolution to call for the university's divestment from private prisons and corporations that build border walls, naming Lockheed Martin, Raytheon, General Dynamics, Northrop Grumman, Honeywell, L-3 Communications, Boeing, Bank of America, JP Morgan Chase, BNP Paribas, Suntrust, US Bank Corp., and Wells Fargo.
  • On April 6, 2017, Philadelphia mayor submitted legislation to the city council to divest $2 billion in employee payroll from Wells Fargo. The mayor made the decision after Wells Fargo's recent bank practices that call into question the bank's financial ethics.
  • On April 5, 2017, the City Council of Portland, OR, voted to stop all new investment of city cash in corporate debt. "The vote followed hours of testimony from members of the public who said they did not want their tax dollars supporting corporations." While the decision impacts all corporate securities, companies that were specifically named during public testimony included Nestle, Wells Fargo, and Caterpillar.On April 3, 2017, Missoula City Council voted unanimously to divest from Wells Fargo, citing "shady business practices" and involvement in the Dakota Access Pipeline. The bank currently manages $3 million in city funds.
  • On April 4, 2017, Missoula City Council voted unanimously to divest from Wells Fargo, citing the banks "shady business practices" such as the fake account scandal and involvement in the Dakota Access Pipeline. The city currently has $3 million in city funds in Wells Fargo.
  • On March 20, 2017, D.C. Finance and Revenue Committee is considering a resolution to divest from Wells Fargo because of its involvement with the Dakota Access Pipeline and poor business practices, such as creating 2.5 million fraudulent accounts. Wells Fargo is D.C.'s "bank of record" and the city just renewed a $12 million, five-year contract with the bank.
  • On March 14, 2017, San Francisco’s Board of Supervisors voted unanimously to divest from banks financing the Dakota Access Pipeline, including Wells Fargo. About $1.2 billion of the city’s portfolio, nearly 14 percent, is invested with these 17 banks.
  • On February 22, 2017, Alameda City Council voted unanimously to refrain from investing in Wells Fargo for three years because of the city's involvement in the Dakota Access Pipeline and its "history of controversial practices" such as the bank's creation of 2.5 million fraudulent accounts. The city currently holds $36 million in general checking in the bank.
  • On February 17, 2017, New York City Mayor Bill de Blasio sent Wells Fargo CEO a letter threatening to divest from the company if Wells Fargo continues to finance the Dakota Access Pipeline.
  • On February 16, 2017, Santa Monica passed a motion to divest from Wells Fargo. The city currently has $1 billion in annual transactions and a portfolio that includes $4.6 million in Wells Fargo bonds
  • On February 15, 2017, East Orange City Council, in East Orange, New Jersey, passed a resolution to divest from Wells Fargo for its discriminatory lending practices, fraudulent accounts scandal, involvement in the Dakota Access Pipeline, and support of the Trump Administration.
  • On February 10, 2017, Davis City Council, in Davis, California, voted unanimously to divest from Wells Fargo, citing the bank’s involvement with the Dakota Access Pipeline and the creation of over 2 million fraudulent accounts. Wells Fargo currently provides the city $30 million in investments and $1 million cash balance.
  • On February 7, 2017, Seattle’s City Council passed an ordinance that requires the City of Seattle to commit to fair business practices and to not renew nor make new investments with Wells Fargo for a period of three years
  • On January 29, 2017, University of California decided to terminate $150 million interest reset contract and $300 million line of credit with Wells Fargo, after previously terminating $25 million commercial paper contract in November 2016. The decision was the result of protests by the Afrikan Black Coalition and the Prison Divestment Campaign
  • On October 18, 2016, Massachusetts suspended business with Wells Fargo for one year, removing the bank from a list of approved bond underwriters
  • On October 17, 2016, Ohio Governor John Kasich suspended Wells Fargo from doing business with state agencies for one year. Wells Fargo is excluded from issuing debt, bidding for financial services, or participating in state bond offerings
  • On October 3, 2016, State of Illinois and Chicago suspended investments with Wells Fargo for two years, citing the company’s creation of 2 million unauthorized accounts. Chicago is divesting $25 million from the bank, and Illinois is divesting $30 billion.
  • On July 19, 2016, City of Berkeley adopted a resolution to divest from private prisons and sent a letter to Wells Fargo, and other companies on the “Millions Share List” to divest from private prisons.
  • On February 22, 2016, Portland’s Social Responsible Investments Committee voted to recommend to the city to divest from Wells Fargo for its ties to private prison companies.
 
 
Unless specified otherwise, the information in this page is valid as of
11 September 2023