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