New York City pension chief urges pay clawbacks at Bank of America

11:13 am Tuesday, July 18th, 2023

By Ross Kerber

(Reuters) – New York City’s top pension official has urged Bank of America’s board to claw back pay from executives after the bank agreed to pay $250 million to settle regulatory claims that it double-charged customers and took other steps without authorization.

Since the financial crisis of 2008, provisions to recover pay have been strengthened at top U.S. banks to limit risk-taking. Bank of America did not admit wrongdoing in its July 11 agreements with the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency.

Via a spokesperson the Charlotte, North Carolina-based bank and its board declined to comment.

In a July 17 letter seen by Reuters, New York City Comptroller Brad Lander asked the chair of a committee of the bank’s board to disclose how much pay was recouped from senior and lower-level employees over what he called the bank’s “unsettling conduct.” He also asked for internal reports.

“By holding financially accountable the executives responsible for Bank of America’s costly compliance breakdowns, the Compensation and Human Capital Committee can take an important step toward re-establishing clear expectations of ethical conduct and responsible business practices,” wrote Lander.

Lander oversees public-employee pension funds with some $300 million worth of Bank of America stock. Under a predecessor his office successfully pressed Wells Fargo to claw back pay from its then-CEO in 2016.

On Monday, New York City Assistant Comptroller Michael Garland said in an interview that although there was no admission of wrongdoing at Bank of America, the large fine showed “there was detrimental conduct” that could justify recovery from individual executives.

The CFPB has launched a crackdown on a range of fees it calls unfair including for overdrafts and nonsufficient funds. It said Bank of America charged multiple fees to customers who did not have enough funds in their accounts from February 2018 until February 2022.

The bank said it voluntarily reduced overdraft fees and eliminated all nonsufficient fund fees in 2022.

(Reporting by Ross Kerber in Boston; Editing by Matthew Lewis)