Wells top mortgage co.; Fannie, Golden West out
By COCO SALAZAR
4/15/2005

After holding last year's top spot on a ranking of corporations with the best social responsibility practices, Fannie Mae has been bumped from this year's list entirely.

Business Ethics magazine's list of the 100 Best Corporate Citizens 2005 ranked Wells Fargo No. 6, which was also the highest position held by a mortgage-related entity. The San Francisco-based banking behemoth, which was the second largest originator in 2004, made a strong comeback as it had been absent since appearing at No. 59 in the 2002 list.

"What distinguishes the 100 Best Corporate Citizens from their peers is a commitment to higher standards," the magazine's editor Marjorie Kelly said in a prepared statement. "The list represents the top ten percent of Russell 1000 firms when it comes to corporate social responsibility -- those that perform to a higher standard in serving a variety of stakeholders with excellence and integrity."

In the wake of ethics scandals, KLD Research & Analytics, the social data provider for the ranking, began rating firms on governance practices. The companies are now marked negatively for issues such as accounting restatements or excessive CEO pay, and positively for paying CEOs less than $500,000 per year. The new category of stakeholder service is the eighth, additional to total return to shareholders, community, diversity, employees, environment, human rights and customers.

"Intriguingly," Wells ranked higher than any other company in the human rights category, the magazine said. The bank donated over $93 million last year to 15,000 organizations and also helped finance construction for affordable single-family homes in or around Native American reservations in seven states, bringing private mortgage capital to those historically denied access. Wells reportedly leads as the banker with the most retail locations on Native American reservations.

Wells' claims its commitment to diversity has deep roots. "We were serving immigrants such as the Chinese right after the gold rush," company human resource vice president Pat Callahan reportedly told the magazine. "Now we have a separate Border Banking group set up to meet the special needs of customers of Mexican origin."

Closely behind Wells was Chittenden Corp. in No. 13. Its mortgage-financing arm Chittenden Bank is reportedly Vermont's largest full-service bank with more than 50 offices and 670 employees.

At No. 25 was BankNorth Group Inc., the Maine-based parent of BankNorth Mortgage.

Doral Financial Group jumped 11 spots to No. 35. The Puerto Rico-based financial holding company, which has U.S. banking operations, reported loan volume of $7.8 billion grew 20% from 2003 due to "continued high demand for new housing in Puerto Rico and Doral's strong share of the new housing market, especially in the growing government-sponsored affordable housing loan sector."

In the 39th slot was homebuilder D.R. Horton, which originates loans through DHI Mortgage.

The last half of the list contained Northern Trust Corp.; the parent of Union Bank of California, UnionBanCal Corp.; thrifts Washington Mutual at No. 88 and FirstFed Financial Corp. in 90th place; First Horizon at No. 95; homebuilder Lennar Corp.; Sallie Mae; and Prudential Financial.

While First Horizon announced its was its third consecutive appearance on the list, which has been compiled for six years, the Tennessee-based lender fell 24 spots from the previous year's ranking.

Anyhow, First Horizon's chief executive Ken Glass commented in an announcement, "Trust is the foundation of the financial services business, so being recognized as one of the nation's best corporate citizens is a great honor for us.

"In today's environment businesses are being scrutinized, and people want to know that the companies they choose to do business with and work for are operating in an ethical way. It is an honor for us to be included on this list with great companies who share our commitment to honest business practices."

After reigning on last year's list, secondary lender Fannie did not make this ranking, the magazine noted.

"When this year's initial data analysis was done, Fannie Mae again emerged No. 1, based on 2003 social and financial performance," the magazine said. However, "when we followed up with our standard review of recent problems firms encountered, our panel concurred Fannie Mae had to be pulled," making it one of the 10 companies that exited due to financial or social misdeeds.

Other corporations that did not make this year's list included Comerica Inc.; Golden West Financial Corp., which had made the ranking each year; and Wachovia Corp.

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