On April 18, 2018 Green America’s executive co-director for business, investing, and policy, Fran Teplitz, testified before the Council of the District of Columbia in support of the District holding a hearing on its banking relationship with Wells Fargo. Fran cited the reasons below for the District to explore banking options beyond Wells Fargo, that could meet the District’s needs. Two days later, the Consumer Financial Protection Bureau, levied the largest fine it has ever made -- $1 billion -- against Wells Fargo for its abusive mortgage and auto loan practices.
Following is an excerpt of Fran’s testimony on the need to divest from Wells Fargo:
"For many years, Green America has been working to educate our members and the public on responsible banking options, i.e., banks that support low-to-moderate income communities; that have robust policies that prevent predatory financial practices and that support sound banking policies; and those with strong environmental commitments. These basic characteristics should certainly define the financial institutions used by the District of Columbia.
I am here to urge Councilmember Evans to hold a hearing on the Sense of the Council Urging Reassessment of the Relationship with Wells Fargo Resolution of 2017. It is never too late to change accounts to ones that better align with the District’s principles, the needs of our residents, and the importance of building broad-based prosperity.
As has been widely reported for many years now across the United States, Wells Fargo has a history of abusive practices that harm both people and the planet. A few of these examples include:
- Abuse of consumers – Earlier this year the Federal Reserve took action against Wells Fargo for “widespread consumer abuses” including the well-publicized creation of millions of false accounts in customers’ names. The accounts were created by employees under intense pressure to meet excessive sales goals. More than half a million customers were also shepherded into auto insurance policies they didn’t need. In light of this scandal, Wells Fargo is still in the process of removing several of its board members and the bank’s assets are now restricted to the $2 trillion it held at the end of 2017. This is the first time the Federal Reserve has limited the assets of a financial institution. This is no time to continue a banking relationship with a bad actor who has repeatedly operated against the public interest.
- Gun violence – According to Bloomberg, Wells Fargo is the largest lender (at $431 million in loans and bonds) for gun companies since the Sandy Hook Elementary School shooting in 2012. Given the unacceptable rate of gun violence in DC, one would hope that the city would use its choice of bank to also reflect a commitment to decreasing gun violence.
- Racially discriminatory practices – A federal lawsuit just filed in February of this year by the City of Sacramento cites illegal lending practices by Wells Fargo against African Americans and Latinos. The bank has clearly not been able to rectify its practices – in 2012, Wells Fargo settled the second largest fair lending settlement in the history of the Department of Justice in response to charges that it discriminated against qualified African-American and Latino customers in its mortgage lending between 2004 and 2009. Discriminatory and abusive practices rightly lowered the bank’s Community Reinvestment Act rating which evaluates banks’ performance in low to moderate income communities.
- Climate crisis – Wells Fargo’s financing of fossil fuel infrastructure continues to undermine the transition to a clean energy economy we so desperately need. Financing for pipelines, whether through the Dakotas or under the Potomac, is not in the interest of our energy needs nor in the interest of human and environmental health.
Where we bank, whether as individuals or institutions, is a reflection of our values and our goals. Our everyday financial transactions strengthen the practices and priorities of the banks we choose. Let’s choose to place our funds in financial institutions that best serve our community, our nation, and the environment we share. I urge the Council to begin taking the steps to transition to better banking options."