Davis, CA

City of Davis votes to divest from Wells Fargo Bank

by Felicia Alvarez, The Davis Enterprise

Davis took the first step Tuesday night toward divesting from Wells Fargo Bank, after the Davis City Council voted unanimously to seek out a new banking service in light of the bank’s ties to the Dakota Access oil pipeline and other recent controversies.

The decision will see some $124 million in city banking services moved to another bank by the end of the year. Davis is the second city in the nation to divest from Wells Fargo, following a decision by the Seattle City Council to divest $3 billion in banking activities that was made earlier Tuesday evening.

The vote arrives in the wake of a national controversy surrounding the Dakota Access pipeline and countless local residents who spoke out in recent months against Wells Fargo for partially funding Energy Transfer Partners, the company behind the pipeline.

Davis’ vote came on the same day that the U.S. Army told Congress it will allow the $3.8 billion Dakota Access oil pipeline to cross under a Missouri River reservoir in North Dakota, completing the disputed four-state project. That stretch is the final piece of the 1,200-mile pipeline that would carry North Dakota oil through the Dakotas and Iowa to a shipping point in Illinois.

Last month, the University of California system divested $475 million from Wells Fargo because of the bank’s ties to private correctional facilities. California’s treasurer also put a yearlong freeze on long-standing business arrangements with the bank, after news broke last fall that bank employees had opened millions of unauthorized credit-card accounts to meet sales goals.

For the council, the issue is both of local and moral interest.

Mayor Pro Tem Brett Lee described the bank’s tactics as “ingeniously evil,” as he recalled a Wells Fargo scandal in Tennessee where it was discovered that the bank was targeting low-income communities with predatory lending.

But Lee added, “It’s important to not villainize the regular working folks at Wells Fargo … they aren’t the people making these decisions, which are against the community’s interests.”
While the council meeting stretched past 11 p.m., a passionate group of residents stayed to voice support for the council action.

“Hit them in the pocket where it matters,” urged Becca Payne, a UC Davis student. “When we divest from unjust corporations and unjust banks, that really shows people that we are in solidarity and that we will not be complicit.”

The council vote initiates a request for proposals seeking a new, regionally located bank to handle the city’s accounts. Councilman Will Arnold made a motion to specifically exclude Wells Fargo from the RFP process, which was approved by the council.

The formal RFP could go out by mid-March, with a review process scheduled to occur throughout the summer. Davis could be fully divested from Wells Fargo by December.
Davis has been banking with Wells Fargo since 2011, after a 2010 RFP process was initiated as a way to cut the city’s banking costs. Wells Fargo was chosen for its experience in banking for public agencies and favorable short-term credit options, according to a recent staff report.

The city is unlikely to see cost savings by divesting, according to the staff report, but Councilman Lucas Frerichs hailed the initiative for its potential to invest in the local economy.
“One of the larger issues is spending and investing locally … that’s one of the key reasons for us to be doing this; it’s putting our money to growing our local economy,” Frerichs said.

The move to divest also comes as Davis is evaluating its investment portfolio over the course of the year, including a council direction to ensure that investments align with the community’s beliefs.
Divestment from Wells Fargo also could be expanded to include divestment from any banks that have been sued by the Consumer Finance Protection Bureau, a recommendation from Mayor Robb Davis. Additional information on other controversial banks is expected to come before the council later this month.

Mayor Davis also added that amid these arguments, its important to factor in lifestyle choices as well.

“The reality is, we have to look in the mirror. … We’re part of this complex system thats making these negative externalities,” Davis said, alluding to petroleum uses that are commonplace.

source: http://www.davisenterprise.com/local-news/city-of-davis-votes-to-divest-from-wells-fargo-bank/

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