Huge victory for city pensioners and taxpayers

City Comptroller John C. Liu announced Wednesday, March 23, that the Securities and Exchange Commission (SEC) has upheld the NYC Pension Funds’ shareholder request that banks launch independent reviews of their mortgage and foreclosure practices.

The SEC’s rulings put the NYC Pension Fund request on the ballot at the Citigroup, Bank of America, and Wells Fargo annual shareholder meetings this spring.

“An independent examination of bank foreclosure practices is needed to reassure shareholders and protect pensioners and taxpayers,” Comptroller Liu said.

“The necessity for this becomes even clearer as the weeks and months tick by and more New Yorkers face losing their homes to foreclosure. Regrettably, the banks have failed us on this and even went so far as to try and kick us off the ballot, but the shareholders have prevailed.”

The SEC shot down the banks’ claims that they had already conducted independent reviews of their mortgage and foreclosure processes.

Despite banks’ claims that foreclosure problems are merely technical glitches, regulators have found that robo-signing of foreclosures, missing mortgage documents, and other problems have caused widespread economic damage.

Acting Comptroller of the Currency John Walsh testified to Congress in February that “critical deficiencies and shortcomings” in banks’ foreclosure procedures have resulted in violations of state and local laws and harm to the mortgage market and “the U.S. economy as a whole.”

The SEC allowed JPMorgan Chase to remove the NYC Pension Funds request from its spring agenda, accepting the company’s argument that another group of shareholders filed a similar proposal first.

The New York City Comptroller serves as the investment advisor to, custodian and trustee of the New York City Pension Funds. The New York City Pension Funds are comprised of the New York City Employees’ Retirement System, Teachers’ Retirement System, New York City Police Pension Fund, New York City Fire Department Pension Fund and the Board of Education Retirement System.

The New York City Pension Funds hold a combined 119,770,418 total shares in Bank of America Corporation (NYSE: BAC), Citigroup Inc. (NYSE: C), JPMorgan Chase (NYSE: JPM), and Wells Fargo & Company (NYSE: WFC) for a combined asset value of $1,698,616,635.18 as of 3/21/2011.