The Los Angeles City Council has amended its Responsible Banking Ordinance to crack down on banks with predatory lending practices, according to a release from the advocacy group Committee for Better Banks.
If signed into law by Mayor Eric Garcetti, the first-in-the-nation rules would require banks that do business with the city to disclose its sales goals and other potentially predatory behaviors.
The move would likely “freeze out” Wells Fargo, the Los Angeles Times reported in December. Wells Fargo is the primary bank for the city, and held an average daily balance of $94.5 million for the city during the last fiscal year, the Times said. Wells Fargo admitted it had opened 3.5 million customer accounts without permission between 2011 and 2016, and was ordered to pay $185 million in fines and penalties, including $50 million to the city of Los Angeles, MyNewsLA said.
“Together this council must take a stand against corporate greed, unfair business practices and a pervasive atmosphere that has poisoned the trust of Angelenos as well as millions of Americans across this great country,” City Councilman Mitch O’Farrell said at the time.
The amendments also would require banks doing business with the city to disclose their Community Reinvestment Act score, a federal metric that tracks how well banks are doing meeting the credit needs of the communities where it does business. It would also require banks to notify the city of any pending enforcement actions against it, and certify that whistleblower protection policies are in place.