Alameda uses Wells Fargo for its operating
accounts and owns three securities.
Wells Fargo has been under fire from state legislatures, including California, and numerous cities, namely Seattle, for it role in a systemic bank account scandal affecting millions of its own customers. The Alameda City Council is poised to join the chorus against the banking giants after it unanimously voted early Wednesday morning to immediately stop any new investments with Wells Fargo while the city staff and city treasurer study a complete divestment.
“If we’re going to be using banking services or having direct investments in a banking institution, in a lot of ways, if there’s bad behavior and we do nothing, we’re passively condoning it and we’re not really speaking up on behalf of our constituents that are being impacted,” said Alameda Councilmember Malia Vella, who authored the referral with Councilmember Jim Oddie.
Last November, East Bay State Sen. Steve Glazer held hearings in Sacramento over Wells Fargo’s role in the banking scandal. He unbraided bank officials who skipped the hearing, while calling the California founded bank an "outlaw institution." Seattle and Davis, Calif, have approved divestment plans from Wells Fargo this month. In both cities, divestment was also used to protest Wells Fargo's investment in the controversial Dakota Access Pipeline.
“We have a series of bad behaviors by big banks, including Wells Fargo,” said Oddie, “the fraudulent accounts--and what I think is a bad behavior--investing in the Dakota pipeline, and the foreclosures shenanigans that really impacted our neighboring cities.”
Alameda City Treasurer Kevin Kennedy said staff has spent the past few months discerning the city’s exposure to Wells Fargo banking products and investments. Alameda uses Wells Fargo for its internal operating accounts, said Kennedy, and currently owns three securities from the bank.
But before any official Request for Proposal for new banking services, staff will need to decide whether any other financial institution can suitably replace Wells Fargo. “It could turn out that the devil we don’t know if worse the devil we know,” said Oddie.
A third vote for possible divestment down the line may come from Councilmember Frank Matarrese, who urged for the council to clearly define measurements for choosing a suitable bank. Matarrese added displeasure with the numerous instances of wrongdoing emanating in recent years from banks. “The more I find out,” he said, “the worse it gets.”