Revelations that thousands of Wells Fargo employees opened millions of fake accounts has led San Francisco Treasurer Jose Cisneros to remove the financial institution from a city banking program.
Cisneros is kicking out Wells Fargo from Bank On San Francisco, a program that helps low-income people and those with credit problems open checking and savings accounts.
“Given what we’ve heard about what’s happening at Wells Fargo, we’re not sure we can guarantee people that their money will be safe there yet,” Cisneros said at a news conference outside City Hall on Friday.
“We certainly hope someday again soon that will be the case,” he said, leaving open the possibility that if the bank made reforms, it could return to the program’s list of institutions.
The treasurer is calling on other cities around the country with similar Bank On programs to also drop Wells Fargo. He plans to travel to Washington, D.C., next week to meet with representatives of some of those cities to discuss the bank’s involvement in the program.
Earlier this month the Consumer Financial Protection Bureau fined the bank $185 million to settle allegations that its employees secretly opened unauthorized accounts for customers in order to meet sales goals.
That led to a Senate Banking Committee hearing on Tuesday, when CEO John Stumpf apologized for betraying customers’ trust.
Cisneros is not the only city official upset with the bank that calls San Francisco home.
“There is no justification for what has happened,” Mayor Ed Lee said in a statement. “Thousands of people, including San Franciscans, have been harmed by these actions,” Lee said.
Lee’s office has contacted senior leadership at Wells Fargo about the scandal. The mayor wants to know how many San Francisco account holders were affected and how many employees based in the city were fired.
The mayor is calling on City Attorney Dennis Herrera to look into the issue.
“Those responsible must be held accountable and those impacted must be compensated,” Lee said.
A spokeswoman for the city attorney said the office is monitoring the issue, but has yet to take any action.
Supervisor David Campos said the Wells Fargo revelations will exacerbate the mistrust many immigrant communities have toward banks.
“We’ve had to do a lot of work to let people know, ‘You’re better off coming forward and actually putting your money in these banking institutions,’ ” Campos said in both English and Spanish at Friday’s news conference. “Now we have to redo that work.”
The city’s action against Wells Fargo comes a day after a local shareholder of the bank sued 17 of its directors and officers in San Francisco Superior Court.
William Sarsfield, a financial consultant who is a senior adjunct business professor at Golden Gate University, is seeking the recovery of profits Wells Fargo allegedly gained from the phony accounts.
The bank has yet to comment on the lawsuit and Mayor Lee’s request for information.
But a Wells Fargo spokesman said the decision to remove the bank from San Francisco’s program was disappointing.
“Wells Fargo has worked with Bank On programs for 10 years to ensure access to financial education, services and products for those outside of the financial mainstream,” said bank representative Ruben Pulido.
“We remain committed to addressing the needs of the underbanked and to collaborating with Bank On programs throughout the United States,” Pulido said in a statement. “It is disappointing that Mr. Cisneros has chosen to take an action that will only deter these efforts and impact those who need resources the most.”
During Tuesday’s Senate testimony, Stumpf said he was “deeply sorry” that the bank “failed to fulfill our responsibility to our customers, to our team members, and to the American public” and didn’t act sooner to stem what he called “this unacceptable activity.”
KQED’s Ryan Levi contributed to this post, which has been updated.