San Francisco's leaders are looking to cut all business with Wells Fargo, its hometown bank.
Two San Francisco supervisors on Tuesday introduced a resolution that would "end all business with Wells Fargo," in response to the fake account scandal and other practices that have harmed consumers.
San Francisco supervisors John Avalos held a press conference on the steps of San Francisco City Hall where he outlined a plan to end business with any financial institution that is "found to have engaged in the practice of fraudulently opening accounts."
The proposal, which could be voted on as early as next week, also calls for the Office of the Comptroller of the Currency "to explore if Wells Fargo's national banking charter should be revoked."
The plan is a stark reminder that local governments can pile on when a bank runs afoul of basic business practices. The proposal effectively puts all banks on notice by seeking to bar any future business with institutions that create fraudulent accounts.
"While Wells Fargo has not been alone among major banks in its reckless and fraudulent practices, including predatory lending and illegal foreclosure activity, it [is] not yet known if other big banks engaged in similar illegal activity around opening accounts and providing products which the client did not request," the four-page resolution states.
Jennifer Langan, a Wells spokeswoman, said the bank "is committed to fix what went wrong and restore the public trust."
Wells has been under intense scrutiny since Sept. 8 when it agreed to pay $190 million to settle claims by the Los Angeles City Attorney's office and federal regulators for opening unauthorized accounts. The bank fired 5,300 employees over a four-year period for opening roughly 2 million unauthorized deposit and credit card accounts.
Last week, Wells' former CEO John Stumpf retired from the company, the second high-profile executive to leave the bank after Carrie Tolstedt, the head of community banking, was allowed to retire in July. The bank's board has clawed back $41 million in pay from Stumpf and $19 million from Tolstedt.
Yet the San Francisco supervisors also called for a criminal investigation of Stumpf. The Justice Department reportedly launched an investigation last month after receiving a criminal referral from the Consumer Financial Protection Bureau.
In another twist, the supervisors' proposal requests that the director of health explore whether the city of San Francisco can revoke the renaming of "Wells Fargo Plaza" at San Francisco General Hospital.
Wells has donated more than $100 million over the past five years to Bay Area schools and nonprofits, Langan said. The bank employs 17,000 people in the San Francisco area.
The proposal suggested that Wells may have engaged in further wrongdoing.
"It is not yet known if the sales staff in the commercial or government banking divisions of Wells Fargo were similarly pressured to add products to customers," the resolution states.
If the resolution passes, the city and county would be required to research existing business relationships with Wells and determine the feasibility of ending them, Avalos said.
"It's disheartening to see our hometown bank was engaged in this sort of reckless behavior, and that its initial response was to scapegoat lower-level employees while senior executives walked with millions," Avalos said in a press release. "Today's resolution makes it clear that we expect that companies who do business with San Francisco to act ethically and to follow the law."
Last month, San Francisco Treasurer Jose Cisneros suspended Wells from Bank On San Francisco, a program to help underbanked consumers open bank accounts.
"By cutting financial ties to the bank, San Francisco is communicating in a language a bank understands: money," Cisneros said in a press release. "I look forward to working with my partners in city government to make it clear that preying on low-income consumers will not be tolerated."
The San Francisco supervisors also distributed a list of seven separate settlements and one jury award totaling $1.7 billion that Wells agreed to in the past two years as proof of the banks' unethical conduct.