Nearly one year to the day that San Leandro officials approved an initial step toward divesting from Wells Fargo, the San Leandro City Council is only now moving forward with cutting all ties to the bank.
A Request for Proposals was released last week for a full-service bank to replace Wells Fargo, San Leandro City Manager Jeff Kay, said Nov. 13, during a Finance Committee meeting. Because of the upcoming holiday season, the city does not expect to receive responses to the RFP until after the first of the year, said Finance Director David Baum.
San Leandro followed several other East Bay cities last year in protesting Wells Fargo’s involvement in a number of ethics scandals. But it’s Wells Fargo’s financial support for the controversial Dakota Access Pipeline (DAPL) project– opposed by many environmentally conscience groups–that is fueling the movement.
The council vote on Nov. 20, 2017 directed its finance department to divest the city of a $700,000 investment note with Wells Fargo. But the intent of the council was to eventually cease all business with the banking institution. Wells Fargo is currently San Leandro city government’s primary bank, providing day-to-day banking and payroll services.
Few references in the RFP make reference to the Dakota Access Pipeline or other fossil fuel-related projects. San Leandro Mayor Pauline Russo Cutter said she believes too many restrictions early in the process may not yield many qualified candidates. But the discussion at last week’s finance meeting strongly suggested ties to fossil fuels will be viewed negatively by the city.
San Leandro Councilmember Ed Hernandez, also a member of the fiannce committee, however, questioned whether the city should even bother sending the RFP to banks with known ties to DAPL. He also acknowledged the city is likely to pay a premium for services provided by a presumably smaller institution that holds no investments in fossil fuels.
With smoke from the Northern California wildfires choking the air in San Leandro, several members of the public at the finance meeting urged for greater urgency. “We all know that a city council is capable of moving quicker if our lives depended on it and you’re not behaving in that fashion,” said San Leandro resident Lawrence Abbott.
Three unidentified banks with no ties to fossil fuels are already on the city’s radar, said Cutter. In addition to further discussion on the issue, she added, she expects a community forum could be scheduled before final approval of a new banking institution is made early next year.
I have to say I’m not surprised by this story. Wells Fargo has gotten bad headlines for years, decades really, and it just seemed inevitable that its brand name would endure systemic risk. Reputation matters for financial services. I’ve been using the same cheap basic accounting software for like ever, and I’m sure there are fancier systems out there, but knowing exactly how it works and that it works and that it’s secure is worth quite a lot to me.
It will of course be most interesting to see which are the banks and which of those banks the staff and the council have a financial interest. That would be typical of San Leandro.