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NEWS RELEASE from California Reinvestment Coalition (CRC)
and Community Reinvestment Association of North Carolina (CRA-NC)
For Immediate Release
April 25, 2005
Event Date: Monday, April 25 10:30 am
Event Location: Wells Fargo Bank, 3027 16th Street & Mission, San Francisco
Contacts: Kevin Stein, CRC, 415-864-3980
Peter Skillern, CRA-NC, 919-801-3074
Follow The Money
Shareholder Resolution Urges Wells Fargo To Cut Off Payday Lenders
SAN FRANCISCO, CA - The California Reinvestment Coalition (CRC) and the Community Reinvestment Association of North Carolina (CRA-NC) followed a money trail today to highlight Wells Fargo & Company's funding of payday lenders. The groups are part of a coalition of community groups and investors supporting a shareholder resolution to be voted on at Wells Fargo's annual shareholder meeting on Tuesday, April 26. The resolution asks the bank to cease and desist providing credit services to payday lenders.
Members of the two community groups followed a money trail of oversized dollar bill footprints leading from the Wells Fargo Bank at 3027 16th Street to a nearby Money Mart. There, a giant check for $55 million was presented - the amount that Wells Fargo funds Money Mart to make 460% interest rate loans. Consumer advocates contend that payday lending, a high cost consumer finance product, captures borrowers in a cycle of debt. Consumers often end up paying more in fees than the total principal they originally borrowed.
The California Reinvestment Coalition released a new study in March titled The Financial Divide: An Uneven Playing Field. This study exposes how bank financing has supported the growth of high-priced payday lenders in California. Wells Fargo is one of the chief culprits. "Wells Fargo should not enable payday lenders to make these high cost, abusive loans," said Alan Fisher, Executive Director of CRC.
The Community Reinvestment Association of North Carolina, based in Durham, North Carolina, is the sponsor of the shareholder resolution asking Wells Fargo to end its credit and banking services to payday lenders. Payday lending is illegal under North Carolina law, but Wells Fargo funds payday lenders such as Advance America that pre-empt state laws by partnering with out of state banks.
"Payday lending is not helping consumers who are caught in the debt trap. We are asking Wells Fargo to end its support of payday lenders," said Peter Skillern, Executive Director of CRA-NC.
North Carolina State Treasurer Richard Moore has announced his support of the resolution and directed investment managers for the state's pension plans to vote North Carolina's shares in favor. North Carolina's pension plan holds 2.5 million shares of Wells Fargo with a market value of $152 million.
The number of check cashers and payday lenders has increased nationally from 2,000 in 1996 to 22,000 in 2003. "Rather than provide banking services, traditional banks like Wells Fargo provide millions of dollars to predatory lenders like Advance America, Ace Cash Express and Money Mart," said Fisher.
More information about CRA-NC's Wells Fargo
Anti-Predatory Lending shareholder resolution is available from CRA-NC at http://www.cra-nc.org/wellsfargo.htm.
CRC's study The Financial Divide: An Uneven Playing Field is available from CRC at http://www.calreinvest.org/pdf/CRC_FinancialDivide.pdf.
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About the
The California Reinvestment Coalition's mission is to revitalize California's low-income and minority communities by increasing access to credit and deposit services. Our goals include leveraging the federal Community Reinvestment Act to increase the flow of credit and investments into California's low-income communities and communities of color. CRC engages in research of the financial services industry for public education purposes, the provision of technical assistance to local communities, and participation in the state and federal policy arena.
CRC www.calreinvest.org
About the Community Reinvestment Association
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The Community Reinvestment Association of North Carolina is a nonprofit, nonpartisan research and advocacy organization whose mission is to promote and protect community wealth. We advocate for change in the lending practices of financial institutions to promote wealth building for underserved communities and to end predatory lending practices that strip wealth. Committed to creative advocacy, CRA-NC uses research, education, mobilization, media, litigation, regulatory challenges, legislative advocacy and stockholder actions to initiate change.
CRA-NC www.cra-nc.org