PORTLAND, Ore. – The Portland City Commission yesterday approved a “responsible banking” proposal to deposit city funds in local credit unions and banks, the second major West Coast city to pass a local banking initiative in the past week.
Portland’s Responsible Banking Resolution calls for depositing $250,000 of the city’s money in each of 10 Oregon banks and credit unions. Portland Mayor Sam Adams said the proposal also increases transparency and requires that the city rethink its contract for banking services in order to make it easier for local banks to compete for the business.
The initiative will change Portland’s current investment policy, which blocks investments in credit unions, and allow the city to immediately invest up to the federally insured amount of $250,000 in as many as 10 credit unions in 2012. Then, in 2013, it would allow the city to invest more than the current limit in at least one local credit union.
Such proposals have been gaining momentum since the Occupy movement put more attention on the role of mega-banks in the economic collapse. Los Angeles passed a similar ordinance this week.
The plan had broad popular support but drew opposition from the Oregon Bankers Association, the trade group that represents bankers.
Wells Fargo has been the city’s official bank since winning a public bidding process to provide banking services to the city in 2009. The city has been a customer of the bank since 1962.
