San Francisco may be dropping Wells Fargo for city business after its settlement with regulators over the opening of 2 million accounts in the name of customers without their knowledge between 2011 and 2015.
The hit may be particularly symbolic, however, given that Wells is headquartered in San Francisco and the first Wells location opened in the city in 1852 when it provided banking services to prospectors during the gold rush.
San Francisco Supervisor John Avalos will announce a resolution today that would suspend city business with Wells, including the issuing of municipal bonds and using the bank’s investment products.
“It’s disheartening to see our hometown bank was engaged in this sort of reckless behaviour, and that its initial response was to scapegoat lower-level employees while senior executives walked with millions,” said Avalos. “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 will also direct the 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,” said the release from the city. “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 said that the lost business from governments will not seriously hurt its financial performance.