A US-based multinational banking and financial services company. In 2019, it announced that it would stop financing private prison companies CoreCivic and GEO Group, but its current involvement cannot be verified.
Wells Fargo & Co is a US-based multinational banking and financial services company headquartered in San Francisco. It used to be 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. In 2019, it announced, along with eight other banks, that it would exit the private prison industry.
In 2022, CoreCivic signed a new credit agreement. Unlike in previous years, the company's disclosures to the Securities and Exchange Commission (SEC) regarding this new agreement only named the administrative agent, Alter Domus. While other lenders are also involved, they are not named. Therefore, it cannot be verified whether Wells Fargo is still involved.
Also in 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, the company exchanged its outstanding bonds due in 2023, 2024, and 2026 for newly issued bonds due in 2028. SEC filings do not disclose whether Wells Fargo is still involved in any of these agreements.
The bank's known past involvement includes:
- In April 2013, CoreCivic issued two sets of bonds—one totaling $325 million, with a maturity date of 2020, and the other 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.
- In October 2013, GEO Group issued $250 million of bonds, with a maturity date of 2022. Wells Fargo served as the initial purchaser of the bonds, facilitating the sale of the bonds to the buyers.
- In September 2014, GEO Group issued $250 million of bonds, with a maturity date of 2024. As part of a syndicate of banks, Wells Fargo underwrote $31.3 million of bonds.
- In 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.
- In April 2016, GEO Group issued $350 million of bonds, with a maturity date of 2026. As part of a syndicate of banks, Wells Fargo underwrote $70 million worth of these bonds.
Involvement in Cop City
Wells Fargo is among the corporate backers of the Atlanta Police Foundation (APF), the nonprofit arm of the Atlanta Police Department, which, together with the City of Atlanta, is constructing a militarized police training compound—known as Cop City—on protected forest land. As of August 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. Spanning 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.
- 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.