At B of A's Low-Key Annual Meeting, Questions on Climate Change

Bank of America (BAC) shareholders approved the bank's executive-compensation proposal and its full slate of 13 directors at a low-key annual meeting Wednesday that was surprisingly free of any interruptions or major protests.

Chief Executive Brian Moynihan faced angry comments from more than 30 shareholders, but most criticized the company's financing of the coal industry, not its mortgage servicing or foreclosure practices. Two rabbis and a pastor chided Moynihan for financing coal companies, and one of them sang a song.

The meeting in Charlotte, N.C., drew fewer than 50 protesters, far less than the 600 demonstrators last year, even though the city was preparing for what it termed an "extraordinary event." The designation gave police the authority to search backpacks and duffel bags of anyone who entered a 42-block area near the hotel where the meeting was held.

"The city had overblown expectations based on the comparisons with last year," said Peter Skillern, Executive Director of Reinvestment Partners, a housing counseling and advocacy group based in Durham, N.C., who attended the meeting. "Last year it was a disruptive meeting and this year it was more like a town hall meeting. People came to speak and be heard."

Investors overwhelmingly approved both company's proposed slate of directors and its executive pay plan, which was similar to one put in place in 2012.

Investors rejected six shareholder proposals, including two that sought to ban political spending and one that would have required B of A to conduct an independent audit to determine if the company's servicing practices violate fair-lending laws. Wells Fargo (WFC) shareholders rejected a similar proposal last month that would have required an audit of its servicing operations.

Consumer groups have criticized B of A for its handling of foreclosures and loan modifications, arguing that the bank has been slow to provide relief to delinquent or underwater borrowers. On Monday, New York Attorney General Eric Schneiderman alleged that B of A and Wells Fargo (WFC) have repeatedly violated the terms of last year's national mortgage settlement and said he intends to sue the two banks over 339 different servicing failures documented by his staff and consumer legal service providers since October 2012.

Josh Zinner, co-director of the Neighborhood Economic Development Advocacy Project in New York, told Moynihan that mortgage servicing abuses continue with wrongful denials and interminable delays of loan modifications.

"The situation on the ground is very different from how you're portraying it to shareholders," Zinner said. "Many of these abuses seem to be concentrated in communities of color. The experience of many homeowners is a Kafkaesque experience."

Bruce Marks, chief executive of Neighborhood Assistance Corporation of America, a nonprofit housing advocacy group, asked Moynihan what B of A's plans were for lending to low and moderate-income borrowers given that the qualified mortgage rule could potentially restrict lending to such borrowers or make loans more expensive.

Moynihan said that B of A originated 100,000 loans in the first quarter, 30% of them to low- and moderate-income borrowers.

"Our commitment to that segment is there," he said. "We do have to be careful that with new regulations… it's important that we get homeownership in a balanced and stable way. The issue we've seen is we have to make sure people can stay in their homes and make the payments."

But most people who spoke were interested in how the bank intends to combat climate change and whether it would continue to provide financing to Peabody Energy (BTU), a coal company. Moynihan declined to answer questions about climate change, though he did mention that he recently met with representatives of RainForest Action Network, a San Francisco nonprofit.

"Are there comments on a different topic other than climate change?" asked Moynihan, after some investors went so far as to blame him for drought in the Midwest and the fact that it snowed in Arkansas this spring.

Last year, B of A said it would finance $50 billion in green energy and other environmental projects like lower-carbon transportation and recycling over the next 10 years.