California Reinvestment Coalition

San Francisco Resolution Directs City To Cut Business Ties With Wells Fargo After Fraudulent Accounts

Published October 19, 2016 01:49

San Francisco Resolution

San Francisco, CA, October 18, 2016--- San Francisco Supervisor John Avalos announced a new resolution today, directing the City and County of San Francisco to cut business ties with Wells Fargo Bank. The resolution is being introduced in response to Wells Fargo entering into repeated settlements for practices that harm consumers, including the recent settlement the bank reached after determining that its employees had created over two million fraudulent accounts for customers who did not request them.

Supervisor Avalos explains: “It’s disheartening to see our hometown bank was engaged in this sort of reckless behavior, and that its initial response was to scapegoat lower-level employees while senior executives walked with millions. Today’s resolution makes it clear that we expect that companies who do business with San Francisco to act ethically and to follow the law.”

In addition to barring future business with banks who engage in creating fraudulent accounts, the resolution also directs government staff to research any existing business relationships with Wells Fargo and the feasibility of ending them. It also directs the City Attorney to investigate if other banks are also engaged in creating fraudulent accounts.

San Francisco Treasurer José Cisneros comments: “I started the Bank On San Francisco program because as Treasurer I believe that money is safest in a bank account, not under a mattress. What Wells Fargo has done is deceptive, it is wrong and it is predatory. Two weeks ago I suspended Wells Fargo from Bank On San Francisco, and immediately began ending our existing relationships with this Bank. By cutting financial ties to the bank, San Francisco is communicating in a language a bank understands: money. I look forward to working with my partners in City Government to make it clear that preying on low-income consumers will not be tolerated.”

Paulina Gonzalez, executive director of the California Reinvestment Coalition, comments: “While the fake account scandal was shocking, it’s also important to note that this settlement was one of six settlements that Wells agreed to in 2016 for practices that harmed customers. Appointing Tim Sloan, who’s been at the bank nearly 30 years, raises more questions for us as to whether or not Wells Fargo is serious about making any concrete reforms.”

Grace Martinez, with the Alliance of Californians for Community Empowerment (ACCE), adds: “We’ve seen first-hand Wells Fargo’s willingness to cut corners and engage in harmful practices when it comes to working with homeowners here in San Francisco who were facing foreclosure and who contacted the bank for help. This resolution sends a strong signal that banks who engage in unethical and illegal practices should expect consequences.”

Emily Rusch, executive director of the California Public Interest Research Group (CALPIRG), notes: “Taxpayers’ dollars should not be supporting banks that act dishonestly. Today we want to send a message to Wells Fargo and its competitors that such behavior will not be tolerated by any branch of government. We applaud Supervisor Avalos for standing up for California’s consumers.”

Additional Context:

The resolution directs the city to:
·Create an inventory of all financial dealings with Wells and the feasibility of ending them;
·Directs the City Attorney to investigate if other banks are engaged in similar account practices;
·Consider establishing a Responsible Banking Ordinance to better connect the city’s banking relationships to banks engaged in ethical corporate behavior;
·Calls for a criminal investigation of former CEO John Stumpf; and
·Calls on the OCC (Wells Fargo’s primary bank regulator) to explore whether conditions exist such that the OCC should revoke Wells Fargo’s national banking charter.

A spreadsheet tracking $1.7 billion in Wells Fargo settlements and lawsuits from 2015 to 2016 is available for download here: Wells Fargo Fact Sheet

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CRC has a membership of over 300 nonprofit organizations and public agencies across the State.