New York City will cut ties with scandal-ridden Wells Fargo Bank, Mayor Bill de Blasio and Comptroller Scott Stringer said today, in a press release announcing that each would vote to prohibit the city from depositing money in Wells Fargo accounts. In addition, both said they would vote against the bank being in charge of offering the city's municipal bonds for one year.
De Blasio and Stringer a made their announcement today ahead of a meeting of the New York City Banking Commission. According to the press release, Wells Fargo currently has $227 million in city funds stemming from banking services contracts, and is a trustee to the $2.6 billion New York City Retiree Health Benefits Trust.
However, Wells Fargo was given a "needs improvement" grade under the Federal Community Reinvestment Act because of the bank's recently-revealed practice of opening fake accounts and credit cards under customers' names without their consent. The city's own rules say that New York can only do business with a bank that's graded "satisfactory" by federal regulators.
"The rules are very clear: if you fall below ‘satisfactory,’ we will no longer do banking business with you," de Blasio said in the statement. "I encourage Wells Fargo to quickly clean up its act and do right by the millions of customers who trust the bank with their savings. Until then, we will not be entering new contracts with the bank. Thank you to Comptroller Stringer for his partnership on this issue."
The votes from the mayor and comptroller will both prohibit city agencies from entering into new contracts with Wells Fargo, and will keep the city from renewing or extending any existing contracts it has with Wells Fargo.
"What happened at Wells Fargo was a fraud—and there should be consequences," Stringer said. "We need to send a message to this bank and the broader industry that ethics matter. Public trust is a must—and accountability is non-negotiable. That’s why we plan to take action. We have an opportunity to stand up and do the right thing today, and that’s a moment we plan on seizing. I would like to thank Mayor de Blasio and his team for their leadership on the issue."
"Wells Fargo appreciates the continuing dialogue with New York City and deeply values our relationship with the City," Wells Fargo spokesperson Kevin Friedlander told Gothamist in a statement. "More than four years have passed since the end of our last CRA evaluation period, and we are seeking an expedited review of the 2012-2015 exam. We hope to restore a national CRA rating that reflects our strong track record of lending to, investing in, and providing service to low- and moderate-income communities."