Oakland Considers Divesting From Wells Fargo

Members of the Oakland City Council are looking at bank foreclosure practices when deciding where to put the city’s money.

Wells Fargo currently has the city’s bank contract. Finance Committee Chair Jane Brunner introduced a motion Tuesday requiring that any extension of the contract, which is set to expire next January, be approved by the City Council first.

“We want to find out what they're doing for the city of Oakland,” Brunner said. “We haven't been able to get that information.

While Wells Fargo, Chase and Bank of America have disclosed foreclosure numbers nationally, they’ve declined to disclose their numbers of foreclosures and loan modifications in Oakland.

Oakland already looks at how many loans a bank awards local small businesses. Brunner’s proposal would move the city to look at mortgage practices too. She says that by making the city’s bank contract competitive, these major servicers will be forced to reveal local numbers and negotiate better practices around interest rate modifications and principal reductions. The city is also looking at whether a smaller outfit, like the East Bay’s Mechanics Bank, could handle Oakland's business.

Lynette Neidhardt of Maxwell Park said at Tuesday’s hearing “I would like to see the banks being held accountable by cities, with a procedure to look into someone who might be better.”

Neidhardt is a homeowner who successfully blocked her own foreclosure, she’s part of the New Bottom Line – a national campaign which touts moving over $50 million in cities’ public funds out of big banks and into community banks and credit unions

At the hearing, Assistant City Administrator Scott Johnson emphasized that while foreclosures are a concern, it’s important to keep the city's money safe and accessible.

He said about Wells Fargo, “I think they're very interested in doing business with us, and we're trying to work with them on getting the information that the community and the council desires."

Richmond and Berkeley are looking at similar efforts to divest from banks based on mortgage practices.