Protesters assail BofA mortgage practices
CHARLOTTE, North Carolina |
CHARLOTTE, North Carolina (Reuters) - Hundreds of demonstrators converged on Bank of America Corp's (BAC.N) annual shareholder meeting on Wednesday to press the bank's executives on issues ranging from home foreclosures to financing for the coal industry.
The meeting, held in the bank's headquarters city of Charlotte, North Carolina, drew about 500 protesters, according to a local police estimate. That figure was far higher than prior years.
Demonstrators staged a mock boxing match between two fighters, one as Bank of America CEO Brian Moynihan representing the 1 percent of wealthiest Americans and another representing the "99 percent." Later, marchers - holding signs, banging on drums and dragging a giant inflated ball and chain labeled "debt" - blocked the intersection in front of the meeting site for more than a hour.
Inspired by the Occupy Wall Street movement, demonstrators using the name "99% Power" have been targeting corporate shareholder meetings this year to keep a spotlight on concerns about economic disparity in the United States. More than 500 demonstrators engulfed Wells Fargo & Co's (WFC.N) meeting site in April, resulting in 24 arrests.
Charlotte police were a noticeable presence during the protests, but called it a peaceful demonstration. There were six arrests for trespassing and impeding traffic, police said.
Protesters outside made for colorful theater, but inside the annual meeting proceedings were much more subdued. The bank's shareholders approved the proposed executive pay package, as expected. All shareholder proposals failed to pass.
Speakers complained to CEO Moynihan about mishandled mortgages, loans to coal companies and what they called excessive executive pay. Some left unsatisfied with his answers.
"I felt like it was dodge and deflect," said George Goehl, of National People's Action, which brought about 45 people to the meeting. "There were no real substantive answers."
Most of the questions addressed to Moynihan focused on the bank's handling of loan modifications and foreclosures. A number of speakers said they had trouble working with the bank, which had lost documents or not returned telephone calls.
Moynihan told one shareholder the bank was cleaning up after Countrywide Financial, the lender it bought in 2008. That led Michael Garland, corporate governance director for the New York City comptroller's office, to criticize what he called the CEO's "pro forma" answer.
While Countrywide may have made the loans, Bank of America is now the servicer of those mortgages.
"These are issues that the board and the management are responsible for," Garland said.
Moynihan responded that the bank has 50,000 people working on the issue and has modified more than 1 million loans.
"I think we're doing everything we can," he said.
The New York comptroller's office sponsored a failed proposal that would have required an audit of the bank's mortgage operations.
BANKRUPTCY IS POSSIBLE
In response to another question, Moynihan said the bank has considered bankruptcy for Countrywide and will continue to look at that option. Ally Financial, the former finance unit of General Motors that is now independent of the automaker, is likely to put its mortgage finance arm into bankruptcy soon.
Speakers also urged Moynihan to stop financing coal companies they said were polluting Appalachian communities through their mining practices. Moynihan said the bank would look at the issue and said the company planned to announce a new commitment soon to supporting clean energy projects.
Moynihan, who presided over his third annual meeting, made progress last year building the bank's capital levels, but faces questions about the company's ability to increase future earnings.
One recent effort to boost profit - a $5 monthly fee for debit card use - triggered an outpouring of consumer anger and the bank backed away in November.
Executive compensation is a hot issue during this year's annual meeting season after Citigroup Inc (C.N) shareholders rejected that company's pay plan.
Moynihan received total compensation of $8.1 million in 2011, up from $1.9 million in 2010. He received no cash bonus and most of his stock would pay out only if the company attained performance goals.
Goehl of National People's Action said Bank of America did a good job of allowing shareholders to enter the meeting, although some in his group were upset that Moynihan ended the meeting after two hours, cutting short time for comments.
Shareholder Richard Eskow, however, said he and about 40 shareholders stood in line to get inside only to be told by bank officials that the auditorium was at capacity.
"There were some very angry people," said Eskow, who flew to the meeting from Los Angeles.
Bank spokesman Scott Silvestri said the bank unfortunately did not have room for all shareholders.
(Additional reporting by Lee Howard; editing by Steve Orlofsky, Gerald E. McCormick and Andre Grenon)
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