Wells Fargo donating $1 billion to affordable housing as part of a larger philanthropic shakeup
- Wells Fargo just pledged $1 billion through 2025 toward affordable housing.
- Jon Campbell, head of corporate responsibility at the bank, told Business Insider the donation will put greater emphasis on affordable rental housing.
- The company ranks as one of the most charitable in the country, yet is currently embroiled in a series of scandals, including on that may have adversely impacted low-income housing.
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Wells Fargo announced Wednesday it would donate $1 billion through 2025 toward making housing more affordable.
Jon Campbell, Wells Fargo's head of corporate responsibility, told Business Insider that while the bank has provided charitable grants for homebuyers over the years, the new donation will put greater emphasis on affordable rental housing. In 2012, the company launched an initiative that has since provided grants to 21,000 homeowners.The donation stems in part from a recent study that found no state or metro area in the country has enough affordable rental housing to support lowest-income residents, according to the National Low-Income Housing Coalition. The bank will first use the donation to provide innovation grants that find solutions to tackle the crisis, and the bank plans to announce other steps in the coming months.
"Our view is Americans can't afford housing," Campbell said. "It's a really complex issue. We know that complex issues can't be solved with checkbooks, but we do believe it's an area we have very strong expertise."
Wells Fargo also announced Campbell will step down and Brandee McHale, a former head of corporate citizenship at Citigroup, would take his place.
Wells Fargo has been known as one of the most charitable companies in the country. In 2017, the company gave 1% of its total pretax profit to nonprofits and volunteer programs. Beginning in 2019, the company plans to target 2% of after-tax profit to corporate philanthropy.
Despite its strong corporate social responsibility arm, the company is in the midst of several scandals involving "widespread consumer abuses" that prompted the Federal Reserve to cap the bank's growth in 2018.
The federal government is also looking into whether the bank colluded to lower the price of bids for low-income housing tax credits. The government is supposed to sell credits to affordable-housing developers through a competitive process. Sources told Bloomberg the bank fired two employees in connection to the low-income housing scandal.Campbell said the company has been a leader in providing expertise on affordable housing for years. In the last six years, Wells Fargo financed over 200,000 rental units for veterans, seniors, and previously homeless families. The company has put an additional $119 million in capital to 46 communities to make loans for affordable housing, development, and mortgage.
"We know we're generous, but it's really been gnawing at us that we want to be more than just generous," Campbell said. "We want to tackle something where we believe we can, in a measurable way, move the ball."