East Bay News
Berkeley considers pulling out of Wells Fargo Bank
BERKELEY, Calif. (KGO) -- The city of Berkeley is leading another socially-minded charge. Tuesday night, it voted unanimously to punish Wells Fargo Bank and look for a more socially-minded institution to hold hundreds of millions of dollars in city assets.
"We do other things, some of them tend to be symbolic. But this will be a very, very real blow and will send a very strong message," said Berkeley Councilmember Susan Wengraf.
It's a $300 million message. That's the total amount of the assets the city of Berkeley wants to pull from the Downtown Wells Fargo Bank. Councilmember Jesse Arreguin says he's authoring the proposal in response to the bank's role in the housing crisis that sent the economy spiraling.
"I feel that this is one way in which we can make a statement and push for wider changes and promote better banking practices and more equity in our society," said Arreguin.
But Wells Fargo spokesman Ruben Pulido says, "Over the past three years, Wells Fargo has donated more than $3 million to 89 nonprofits in Berkeley... And less than 2-percent of homeowner-occupied loans in our servicing portfolio have proceeded to foreclosure sale."
The council wants to put its money in community banks or credit unions, but it needs to know if they can handle a city the size of Berkeley.
"Yes, it's possible for community banks to handle the business of the city of Berkeley," said Mechanics Bank senior vice president Rauly Butler.
Butler pointed out not all of them can offer payment collections, revenue sharing, and sophisticated money transfers.
"They have to be collateralized by the bank. We actually have to hold collateral for those deposits. FDIC insurance is not enough," said Butler.
In the end, the council voted to research more socially-minded banks and Mechanics reminded them of their record.
"We did not do the sub-prime lending. We don't have the mortgage issues that the other banks have on the residential side, we don't have foreclosures, and we didn't take TARP funds. I think the city will respect that," said Butler.
So Tuesday night's vote puts the wheels in motion for the city to find a bank that meets their financial and political needs.
berkeley, wells fargo, east bay news, alan wang
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