The University of California will terminate $475 million worth of contracts with Wells Fargo after repeated criticism from the Afrikan Black Coalition, or ABC, over its ties to private correctional facilities.
ABC alleged in a press release that Wells Fargo finances CoreCivic, a company that owns private prisons and detention centers. Additionally, in 2012, Wells Fargo settled with the U.S. Department of Justice over allegations of discrimination against African-American and Hispanic borrowers.
The university terminated a $25 million commercial paper contract with Wells Fargo in November 2016. According to the ABC press release, the university will end its $150 million interest reset contract by April 1. Two-thirds of the $300 million line of credit will be terminated by February, with the remaining $100 million to be terminated as soon as a replacement bank is found.
UC spokesperson Ricardo Vasquez confirmed the university’s divestment from Wells Fargo in an email, stating that the university deemed it appropriate to sever ties in light of the bank’s alleged recent activities regarding unauthorized bank and credit card accounts.
“We value our long-standing relationship with Wells Fargo,” Vasquez said in the email. “Moving forward, we want to continue to engage with the bank as it reforms its business practices under new leadership.”
Wells Fargo spokesperson Ruben Pulido said in an email that the company has supported the UC system since the 1970s and “(stands) ready to provide that … support in the future.” Pulido added that Wells Fargo holds no shares in either CoreCivic or the GEO Group, another private prison corporation.
In December 2015, then-Wells Fargo spokesperson Mariana Phipps told The Daily Californian that Wells Fargo Funds, which is owned by the funds’ investors as opposed to Wells Fargo and Company, holds a small position in the GEO Group and CoreCivic.
“Wells Fargo is a bank,” Pulido said in an email. “We do not set U.S. detention system policy.”
Eniola Abioye, director of field operations for ABC, said in an email that the coalition has been pushing for the university to sever ties with the private prison industry for the past few years.
ABC launched a formal private prison divestment campaign after passing resolutions among Black student unions across the UC system. ABC also launched its “Jails Fargo” campaign — which focused specifically on pushing the university to divest from Wells Fargo — in January 2016.
Abioye emphasized that the combined efforts from students throughout the UC system enabled the coalition to diminish the university’s role in private prisons.
“These victories are achieved through volunteer work done by people also juggling full time school and work schedules,” Abioye said in an email. “It takes a lot of effort from each and every person within the organization to push for change of this caliber.”