Grosso applauds CFO’s willingness to engage on efforts to divest from Wells Fargo

For Immediate Release:
April 18, 2018
 
Contact:
Matthew Nocella, 202.724.8105 - mnocella@dccouncil.us

Grosso applauds CFO’s willingness to engage on efforts to divest from Wells Fargo

Washington, D.C. – The following is a statement from Councilmember David Grosso (I-At Large) on Chief Financial Officer Jeffrey DeWitt’s testimony regarding D.C.’s business relationship with Wells Fargo at today’s Committee on Finance and Revenue oversight hearing:

“I’m extremely excited that we are finally having a public conversation about the need to divest from Wells Fargo and pursue banking policies which reflect the District of Columbia’s values and prioritize our local communities’ needs. I appreciate the advocacy efforts of the D.C. ReInvest Coalition for their dogged support and testimony today to advance these efforts and spark this conversation.

“Every year the District spends $4 million to do business with Wells Fargo as its bank of record. Call it a transaction, call it an investment, either way we enrich Wells Fargo, which for years has engaged in highly questionable sales practices, and financed private prisons, anti-environment, and anti-indigenous projects.

“I want to thank CFO Jeffrey DeWitt for agreeing that we should reassess our relationship with Wells Fargo at the conclusion of the contract. I agree with him that choosing which among the five big bank ‘devils’ D.C. should bank with is difficult, but there are banks that are better than others. When assessing who we do business with, it is vital we take a look at the whole picture, including national trends and recent events, in deciding who is currently the best actor and the best fit for our city.

“I also agree that calling for divestment is simply not enough, and solutions must be studied to meet the District’s banking needs. I look forward to a meeting between advocates seeking divestment from Wells Fargo and the Chief Financial Officer, as well as the results of the study I funded through the FY2018 budget process to explore the feasibility of establishing a public bank in D.C.”

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Grosso seeks to prioritize fair practices and equitable community development in awarding of D.C. banking contracts

For Immediate Release:
November 7, 2017
 
Contact:
Matthew Nocella, 202.724.8105 - mnocella@dccouncil.us

Grosso seeks to prioritize fair practices and equitable community development in awarding of D.C. banking contracts

Washington, D.C. – Today, Councilmember David Grosso (I-At Large) introduced legislation to strengthen existing responsible banking laws to ensure that the District of Columbia is investing in financial institutions that engage in fair lending practices and meet the needs of historically underserved communities.

”While there is certainly no perfect financial institution, we should endeavor to prioritize partnerships with business entities, banks, and other financial institutions that are committed to engaging in fair and responsible business practices and those that fulfill their obligations to meet the credit and other needs of the communities they serve,” said Grosso.

The legislation introduced today, the Strengthening Community Development Amendment Act of 2017 requires that financial institutions seeking to do business with the city highlight the programs, products, and any partnerships they have established to promote affordable housing and equitable development, in addition to submitting community development plans.

The bill also increases the weight D.C.’s Chief Financial Officer must give to a financial institution’s community development score, a rating of how well it meets the credit needs of its local communities, in awarding the District’s banking business.  Finally, it requires the CFO to seek public comment before executing an option year on a contract with banks doing business with D.C.

“Public transparency and accountability should always be paramount when the District of Columbia seeks to conduct business with financial institutions,” Grosso said. “We must ensure that these banks will serve the convenience and needs of their local communities and invest responsibly to help maintain the vibrancy of our neighborhoods through sound services and lending.”

Grosso has been pushing for greater scrutiny of the financial institutions D.C. does business with since earlier this year, calling on the CFO to reassess its business with Wells Fargo and introducing a Sense of the Council resolution urging divestment.

In March, Wells Fargo, D.C.’s bank of record, received a national rating of “Needs to Improve” on community lending from its federal regulator. Despite this and other reports of unethical business practices, D.C. continues its relationship with the troubled bank.

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Strengthening Community Development Amendment Act of 2017

Strengthening Community Development Amendment Act of 2017

Introduced: November 7, 2017

Co-introducers: Councilmembers Anita Bonds, Robert C. White, Jr., Trayon White

FACT SHEET | BILL TEXT | PRESS RELEASE

Summary: To amend the Community Development Act of 2000 to require the Chief Financial Officer to regularly evaluate the community development plans of deposit-receiving institutions and to seek public comment prior to the execution of an option year on a contract with a deposit-receiving institution; and to amend section 47-351.05 of the District of Columbia Official Code to increase the weight the Mayor or CFO must give to a financial institution’s community development score in competitions for District banking business.

Councilmember Grosso's Introduction Statement:

In 2014, the Council unanimously passed the Community Development Amendment Act of 2013, a responsible banking law designed to ensure responsible loans, investments, and services are being provided to our low and moderate income and minority communities.

That law required, among other things, an evaluation of financial institution performance in servicing these communities as part of the criteria for deciding which institutions receive municipal deposits and other city business.

The bill was an enormous victory and step in the right direction to hold large financial institutions accountable to historically underserved communities and ensure their continuous investment in these neighborhoods.

Today, that law needs to be strengthened.

In March, Wells Fargo, the city’s bank of record received a national rating of “Needs to Improve” on community lending from its federal regulator.

Despite the misdeeds cited in the evaluation, the city continues its relationship with the much-maligned Wells Fargo.

While there is certainly no perfect financial institution, we should endeavor to prioritize partnerships with business entities, banks, and other financial institutions that are committed to engaging in fair and responsible business practices and those that fulfill their obligations to meet the credit and other needs of the communities they serve.

My legislation seeks to improve upon the existing community development law in three key ways.  First, it requires that financial institutions seeking to do business with the city must, in addition to submitting their community development plans, highlight the programs, products and any partnerships they’ve established to promote affordable housing and equitable development.

Second, the bill increases the weight the CFO must give a financial institution’s community development score in competitions for District banking business.

Finally, the bill requires the CFO to seek public comment, prior to executing an option year on a contract with banks doing business with the city.

Public transparency and accountability should always be paramount when the District seeks to conduct business with financial institutions. We must ensure that these banks will serve the convenience and needs of their local communities and invest responsibly to help maintain the vibrancy of our neighborhoods through sound services and lending.

Grosso calls on chief financial officer to consider Wells Fargo divestment

Councilmember Grosso sent a letter last week to Chief Financial Officer Jeffrey DeWitt calling on his office to reassess the District of Columbia's relationship with Wells Fargo, in light of its questionable and discriminatory business practices and financing of the Dakota Access Pipeline and the private prison industry.

"As Wells Fargo is the District of Columbia’s bank of record, I believe we have an obligation to reassess our relationship with this entity and join countless other cities in strongly considering divestment," Grosso wrote.

Grosso had previously introduced a Sense of the Council resolution urging divestment from Wells Fargo.

"I understand and can appreciate that state and local governments, in selecting institutions that will meet their needs for depository services, are subject to specific statutory and constitutional restrictions; however we should endeavor to prioritize partnering with business entities and financial institutions that are committed to engaging in fair and responsible business practices and we should always seek to reinvest in local banks to further support community growth.," he wrote.

Read the full letter below.

CM Grosso Letter to CFO on DC divestment from Wells Fargo by Team_Grosso on Scribd