- Robert Galbraith/Reuters
Editor’s Note: This story has been updated to include a statement from Wells Fargo in response to the San Francisco resolution. The full statement is at the bottom of the story.
San Francisco may be dropping Wells Fargo for city business after the bank’s settlement with regulators over the opening of 2 million accounts opened in the names of customers without their knowledge from 2011 to 2015.
John Avalos, a member of San Francisco’s board of supervisors, announced a resolution on Tuesday that if passed would suspend city business with Wells, including the issuing of municipal bonds and using the bank’s investment products.
The move would be particularly symbolic given both that Wells is headquartered in San Francisco and that the first Wells location opened in the city, where the firm provided banking services to prospectors during the gold rush in 1852.
“It’s disheartening to see our hometown bank was engaged in this sort of reckless behavior and that its initial response was to scapegoat lower-level employees while senior executives walked with millions,” Avalos said in a statement on Tuesday. “Today’s resolution makes it clear that we expect that companies who do business with San Francisco to act ethically and to follow the law.”
The resolution in San Francisco would also direct its city attorney to investigate other banks for possible activities similar to those found at Wells.
“In addition to barring future business with banks who engage in creating fraudulent accounts, the resolution also directs government staff to research any existing business relationships with Wells Fargo and the feasibility of ending them,” the release from the city said. “It also directs the city attorney to investigate if other banks are also engaged in creating fraudulent accounts.”
Wells Fargo beat on its quarterly earnings on Friday, and in a leaked conference call last week it said the lost business from governments up to that point would not seriously hurt its financial performance.
UPDATE: Wells Fargo provided this statement to Business Insider on the situation in San Francisco:
“Wells Fargo’s No. 1 priority is making things right with our customers and restoring the public trust; we are dedicated to ensuring that all aspects of the Company’s business are conducted with integrity, transparency and oversight.
Wells Fargo is proud to be San Francisco’s largest private employer with 8,000 team members contributing to the economy of this great City. We also have a workforce of 17,000 across the Greater Bay Area. We want to the public to be assured that all our team members are focused on meeting our customers’ financial needs. That’s why we eliminated product sales goals in the retail banking business, effective Oct. 1, 2016.
We understand government officials are concerned about the financial well-being of our customers-and so are we. That’s why we have provided full refunds to customers we have already identified and we’re broadening our scope of work to find customers we may have missed. We are also contacting each of our impacted deposit account and credit card customers to ensure they still want and need their products. We want to talk to any of our customers who have questions and established a dedicated 24/7 hotline at 1-877-924-8697 to address their concerns.”