The Los Angeles City Council has passed an ordinance — the first of its kind in the country, according to supporters — that would require banks seeking to do business with the city to disclose whether they have sales goals or quotas for employees.
The disclosure requirements, which were pushed by the union-backed Committee for Better Banks, are designed to protect both consumers and bank employees from the sort of aggressive sales tactics that embroiled Wells Fargo in scandal.
Supporters are now calling on Mayor Eric Garcetti, a Democrat, to sign the ordinance, which passed the City Council in late June. Though the mayor has not committed to signing the measure, activists were jubilant Tuesday as they rallied on the steps of City Hall.
“I know that humble, honest, hardworking people are targeted and preyed upon by the financial industry,” said Councilwoman Nury Martinez, who sponsored the ordinance. “We cannot govern the banking industry, but we can foster an environment of transparency and accountability.”
Also speaking at the press conference were activists who said that bank employees face pressure to sell products to vulnerable consumers, including the immigrants and the elderly.
Kilian Colin, a former Wells Fargo employee in San Diego who is now a volunteer with the Committee for Better Banks, said that the activists’ fight should continue until the use of sales goals in banking is banned.
“This is a historic victory for all of us,” he said. “This is not the end.”
The city of Los Angeles’ action is a response to Wells Fargo’s phony-accounts scandal, which emerged from reporting in 2013 by the Los Angeles Times and a subsequent investigation by the L.A. City Attorney’s Office. A Wells spokesman did not immediately respond Tuesday to a request for comment.
Sales quotas at Wells Fargo were widely blamed for creating an environment in which employees opened as many as 3.5 million customer accounts without their permission. Since then, Wells has overhauled its formula for compensating retail banking employees.