LOCAL NEWS

City of Seattle: ‘We cannot work with Wells Fargo’ as a lender

Oct 7, 2016, 2:34 PM | Updated: Oct 8, 2016, 9:36 am

In light of Wells Fargo’s banking scandal, the City of Seattle will no longer work with the bank as a lender on a $100 million bond financing for Seattle City Light.

Related: 5,300 Wells Fargo employees fired for creating unauthorized accounts

City of Seattle mayor Ed Murray, council president Bruce Harrell and finance and budget committee chair Tim Burgess signed the letter, saying they believed that Wells Fargo was socially irresponsible with its banking practices.

The mayor told KIRO 7 News’ Essex Porter that city leaders are evaluating other business they have with Wells Fargo.

Wells Fargo has faced weeks of scrutiny since federal regulators announced that it created two million fake accounts, most likely to meet sales goals.

Here are the key development on the Wells Fargo scandal:

  • Federal regulators said Wells Fargo employees secretly created millions of unauthorized bank and credit card accounts — without their customers knowing it — since 2011.
  • Money in customers’ accounts was transferred to these new accounts without authorization.
  • Phony accounts earned the bank unwarranted fees and allowed Wells Fargo employees to boost their sales figures and make more money.
  • 5,300 employees at Wells Fargo were fired.
  • The San Francisco-based bank will pay $100 million to the Consumer Financial Protection Bureau.

In the letter, the city leaders stated that the $100 million bond financing for Seattle City Light was on track to close this month.

Related: How do you know if you were a victim of a fake Wells Fargo account?

The leaders demand that in order for the bank to re-establish a relationship in the future, it must provide detailed information on how it intends to rectify the situation.

 KIRO 7 News obtained the letter the leaders wrote. Read it below:

As you know, following a competitive process. Wells Fargo was awarded a contract in 2013 to provide banking services to the City of Seattle. While this contractual relationship has met the City’s banking needs, we were extremely disappointed to hear of the alleged unethical and likely illegal conduct that Wells Fargo has acknowledged engaging in.

Wells Fargo’s practice of opening accounts in customers’ names without their knowledge or approval is reprehensible, particularly in that it appears this strategy was not only condoned by management, but encouraged. Such a betrayal of the public trust is completely unacceptable. Your organization’s underhanded practices greatly harm not only the customers who have been shouldered with bogus fees and unfairly reduced credit scores through no fault of their own, but also your own reputation and relationship with your institutional customers, including the City of Seattle.

The people of Seattle expect far better from the City’s business partners. In light of this, and effective immediately, we have concluded that we cannot continue to work with Wells Fargo as lender on the $100 million bond financing for Seattle City Light that was on track to close this month. The City and its taxpayers must trust the practices and integrity of the institutions that handle our public funds.

If we are to consider continuing a relationship in the future, it is essential that you provide us with detailed information about how you intend to rectify this situation, make reparations to those harmed, and ensure something like this never happens again.

One factor that made Wells Fargo competitive in earning the City’s business was a commitment to socially responsible banking practices by providing service and outreach to all members of our community. Especially important was your work with the Bank On Financial Empowerment Network and support of Express Credit Union in providing financial education and services for low- and middle-income households and the unbanked.

While these efforts have been appreciated, the recent allegations have undermined our confidence in Wells Fargo as a trusted partner. Your good faith effort to transparently reform your business practices and make reparations to those harmed will be required to rebuild that trust.

Wells Fargo released the following statement to KIRO 7 after  breaking the story of the city’s letter: 

Wells Fargo is disappointed that the City of Seattle has decided to cancel our investment in its municipal light and power revenue bonds facility, which would have used the bank’s very strong balance sheet to help the city manage its capital.

We are proud of the support we have diligently and professionally provided the city as its operating bank since 1999 to support its government, communities, and residents. Our highly experienced and proven government banking, securities, and treasury management teams stand ready to continue delivering outstanding service to the City of Seattle.

We manage the city’s business in our Government & Institutional Banking division, which is separate from our retail bank. We are taking important steps to ensure that the sales culture in our retail banking business is 100-percent aligned with our customers’ interests, including ending product sales goals for everyone in the retail banking business to make certain nothing gets in the way of doing what’s right for customers.

Local News

park...
KTTH staff

Video: Gunfire erupts around bar outside of T-Mobile Park

Watch video of a shooting recorded from inside Tony T’s Sports Lounge Saturday morning.
1 day ago
heatwave...
Ted Buehner

Mid-week heatwave forecast to envelop Western WA

Another period of warmer than average weather is on tap this week as a heatwave moves into Western Washington.
1 day ago
seattle seahawks...
Frank Sumrall

Russell Wilson booed during Sue Bird tribute video, tension-filled reunion on the horizon

His segment in the tribute video was met with a shower of boos at Climate Pledge Arena earlier this week.
2 days ago
(KIRO 7)...
Nicole Jennings

Residents celebrate West Seattle Bridge reopening, but still much to do

There has been a lot of criticism over the two-and-a-half years the bridge has been closed, mainly over how long it has taken.
3 days ago
(KIRO 7)...
KIRO Newsradio Newsdesk

KIRO Newsradio Headlines: Lightning storms ignite 13 new wildfires in Eastern Washington

The KIRO Newsradio newsdesk brings you its top stories on the afternoon of Aug. 12.
3 days ago
Former U.S. President Donald Trump leaves Trump Tower to meet with New York Attorney General Letiti...
Associated Press

FBI seized top secret documents in Trump estate search

“Not only will I not oppose the release of documents," Trump said. "I am going a step further by ENCOURAGING the immediate release of those documents.”
3 days ago

Sponsored Articles

Work at Zum Services...

Seattle Public Schools announces three-year contract with Zum

Seattle Public Schools just announced a three-year contract with a brand-new company to the Pacific Northwest to assist with their student transportation: Zum.
Swedish Cyberknife 900x506...

June is Men’s Health Month: Here’s Why It’s Important To Speak About Your Health

According to the Centers for Disease Control and Prevention, men in the United States, on average, die five years earlier than women.
...

Anacortes – A Must Visit Summertime Destination

While Anacortes is certainly on the way to the San Juan Islands (SJI), it is not just a destination to get to the ferry… Anacortes is a destination in and of itself!
...

Ready for your 2022 Alaskan Adventure with Celebrity Cruises?

Celebrity Cruises SPONSORED — A round-trip Alaska cruise from Seattle is an amazing treat for you and a loved one. Not only are you able to see and explore some of the most incredible and visually appealing natural sights on the planet, but you’re also able to relax and re-energize while aboard a luxury cruise […]
...

Compassion International Is Determined to ‘Fill’ a Unique Type of Football ‘Stadium’

Compassion International SPONSORED — During this fall’s football season—and as the pandemic continues to impact the entire globe—one organization has been urging caring individuals to help it “fill” a unique type of “stadium” in order to make a lasting difference in the lives of many. Compassion International’s distinctive Fill the Stadium (FtS, fillthestadium.com) initiative provides […]
...

What are the Strongest, Greenest, Best Windows?

Lake Washington Windows & Doors SPONSORED — Fiberglass windows are an excellent choice for window replacement due to their fundamental strength and durability. There is no other type of window that lasts as long as fiberglass; so why go with anything else? Fiberglass windows are 8x stronger than vinyl, lower maintenance than wood, more thermally […]
City of Seattle: ‘We cannot work with Wells Fargo’ as a lender