In what may be the most damaging blow to Big Banks since the overwhelming success of Bank Transfer Day in late 2011, the City of Berkeley recently announced its intention to withdraw all financial assets from Wells Fargo.
On Tuesday night, the City Council voted unanimously to find a more socially-minded institution to hold approximately $300 million in city assets. Council members said that they hoped the decision would send a very strong message to the Big Banks ultimately responsible for 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,” Councilmember Jesse Arreguin told a local ABC news outlet.
In preparation for this major financial migration, the City of Berkeley is searching for a local credit union or community-based bank that can handle the payment collections, revenue sharing, and sophisticated money transfers its requires.
While credit unions and smaller banks can normally offer all of the same financial services, unique arrangements might have to be made in order for them to collateralize such a large amount of assets, since they don’t usually carry that much FDIC insurance.
As might be expected, the local Wells Fargo branch was shocked and somewhat defensive following the City Council’s announcement.
“Over the past three years, Wells Fargo has donated more than $3 million to 89 nonprofits in Berkeley… And less than two percent of homeowner-occupied loans in our servicing portfolio have proceeded to foreclosure sale,” said Wells Fargo spokesman Ruben Pulido.
While that may be true on a local level, there is no denying the dubious actions of the Wells Fargo corporation:
In my opinion, the City of Berkeley is to be applauded for its decision to take bold action against the Big Banks, many of which have yet to face any significant consequences for their negligent and often illegal actions. Let the politicians form their task forces and sub committees. In the mean time, intelligent citizens like those on the Berkeley City Council will continue to take action in the most powerful manner possible: voting with their dollars.
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