Wells Fargo & Co. pledged $1 billion to support affordable housing initiatives as the scandal-tarnished bank embarks on a plan to spend 2% of its profits on philanthropy.

The six-year commitment to housing announced Wednesday is part of a broader overhaul of the lender’s philanthropic strategy, which also will focus on supporting small businesses and helping consumers manage finances. The bank previously said it will donate a cut of after-tax earnings to a variety of causes starting in 2019, after pumping $444 million into 11,000 nonprofits last year.

Wells Fargo said Wednesday that Brandee McHale will join from Citigroup Inc. to oversee its philanthropic push. McHale was most recently head of corporate citizenship at Citigroup and president of its foundation. Jon Campbell, Wells Fargo’s head of corporate philanthropy and community relations, previously announced plans to retire at the end of this year.

AD
AD

The U.S. housing shortage is particularly acute in Wells Fargo’s hometown of San Francisco, where burgeoning technology ventures have minted millionaires and priced out many other residents -- but it’s also an issue where the bank separately faces a fresh scandal. As Bloomberg reported last week, the firm is in talks to settle a U.S. probe into improper bidding for low-income housing tax credits.

The lender is pursuing a variety of strategies to improve its reputation after a wave of scandals began emerging in 2016, exposing misconduct in many of its business lines. Tim Sloan, who became chief executive officer to clean up the mess, ended up stepping down this year after regulators and lawmakers expressed dissatisfaction. The board named general counsel Allen Parker to run the firm on an interim basis while seeking an outsider to fill the CEO post.

To contact the reporter on this story: Hannah Levitt in New York at hlevitt@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, David Scheer, Dan Reichl

©2019 Bloomberg L.P.

AD
AD