The Seattle City Council unanimously voted end all business with Wells Fargo as soon as the contract ends on December 31, 2018, according to an article by Ashley Stewart for Puget Sound Business Journal.
The city will begin a competitive bidding process to find a new bank that will take over for Wells Fargo. As for the city’s reasons, the council cited the bank’s financing of the Dakota Access Pipeline
The council also brought up Wells Fargo’s recent fake account scandal, wherein employees opened more than 2 million fake accounts to get sales bonuses.
From the article:
Wells Fargo Washington market CEO Mary Knell asked for another chance ahead of the vote.
"A socially responsible business owns up to mistakes and makes itself better," she said in a statement to the Puget Sound Business Journal. "Our No. 1 priority is rebuilding your trust. We are resolute in strengthening our culture and becoming a company that Seattleites take pride in."
After the city pulls out, the bank will lose $3 billion per year of account flow, and an average balance of $10 million from Seattle’s account, the article states.
To bid for the new contract, banks must meet the following requirements:
- $300 million to $450 million in collateral
- Capacity to process up to $450 million in deposits
- Robust overdraft protection
- Adequate number of branches to serve the city’s 80 payment centers
But Seattle isn’t the first to cut ties with the bank. Previously Ohio, the city of Chicago, the state of California and the state of Oregon all suspended ties with Wells Fargo in the wake of the scandal.
(Photo credit: DW labs Incorporated / Shutterstock.com)
