Wells Fargo Responds to Berkeley Bank Debate
Council members voted Tuesday to drop the city's Wells Fargo contract. Wells Fargo representatives were listening and sent the following response.
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Debating whether or not to discontinue a contract with Wells Fargo for the city's banking services, city officials, community members and representatives from Mechanics Bank argued against the banking giant during Tuesday's city council meeting.
Council members voted against automatically renewing the contract with Wells Fargo, opting instead to consider moving the city's $300 million bank account to a local bank or credit union.
A representative from Mechanics Bank, which is headquartered locally in Richmond, assured the council that the company could handle the city's banking needs if they chose to drop Wells Fargo. The Mechanics Bank spokesperson told the council that the vast majority of banks act responsibly and are not representatives of the 1 percent.
Several migrant workers also spoke in support of the Berkeley's proposed "Responsible Banking Policy," which would veto Wells Fargo for the part it played in the subprime mortgage crisis. The workers cited Wells Fargo's support of politicians and companies accused of criminalizing and mistreating immigrants.
Meanwhile, representatives from Wells Fargo were listening in. Wells Fargo's Assistant Vice President of Communications Ruben Pulido issued the following statement at the conclusion of the council discussion:
Wells Fargo believes that lending to small businesses and job creation are important issues for our economic recovery. Nationally, Wells Fargo employs 1 in every 500 Americans—and more than 20,000 people in the greater Bay Area. Additionally, we have hundreds of job openings in the Bay Area and encourage people to apply (https://www.wellsfargo.com/careers/).
Wells Fargo is ranked as the No. 1 SBA 7(a) lender in the U.S., in California and in the Bay Area. In 2011, Wells Fargo extended $13.9 billion in new loan commitments to small businesses (businesses with less than $20 million in annual revenues) – up 8% from 2010 when we loaned $12.9 billion.
Furthermore, Wells Fargo has loaned more money to America’s small businesses than any other bank for nine consecutive years, according to the latest Community Reinvestment Act (CRA) government data (2010). The company is also the top financial services corporate philanthropist in the Bay Area, having donated $20.7 million to Bay Area schools and nonprofits in 2010. In summary, Wells Fargo is committed to our customers, and to the communities where we do businesses and our team members live and work.
Wells Fargo also issued a statement prior to the meeting. Read the story here.
Thanks to Adelyn C. Baxter and Lars Skjerping for providing live updates from the Berkeley City Council meeting via Twitter.
sandy schaffell
1:47 pm on Wednesday, February 1, 2012
I think giving Berkeley's business to a local bank is the correct step to take. Wells Fargo is not such a consumer-friendly institution, while Mechanics Bank certainly does its bit for our community. Further, Mechanics did not take government money after the financial debacle of 2008, while Wells Fargo did (http://www.cbsnews.com/stories/2009/02/09/eveningnews/main4788018.shtml).
PragmaticProgressive
5:28 am on Thursday, February 2, 2012
To be accurate, Mechanics _planned_ to take TARP money and then backed out when it realized that doing so would require it to make loans it might not wish to make, cap executive pay, and limit shareholder dividends. http://www.bizjournals.com/sanfrancisco/stories/2009/01/19/daily73.html?page=all
Systemically important banks (like Wells, BofA, Citi, JPMorgan) were all _required_ to take the money because if some did and others did not, there would have been widespread panic and runs on banks, deepening the crisis.
In sum, I think the facts are a little more complex than you allow.
Regarding community support, Wells (which is SF-based and hence plenty local) and its employees do a lot and certainly more than Mechanics. Millions of dollars in nonprofit support, volunteer days at Habitat for Humanity, etc. Wells also helped restructure financing at my kid's school, something Mechanics was unable/unwilling to do.
Check the annual report for Berkeley Public Educational Foundation -- Wells appears twice in the top four tiers of giving; Mechanics doesn't show up until tier 5. Which bank is the lead season sponsor at Berkeley Rep? Wells. Mechanics doesn't show up until the fourth tier.
All that said, the City should absolutely seek the best terms it can get: that is good business practice. Our council, however, should quit pandering and get to work on the hard problems: broken streets, unfunded pensions, etc.
ryan
2:51 pm on Wednesday, February 1, 2012
I believe the City's money should be kept locally, meaning a locally grown and owned bank or credit union.