It has been almost a year since Wells Fargo was fined an unprecedented $185 million dollars for illegally opening 3.5 million accounts. Since then, politicians from Los Angeles and Philadelphia to Raleigh and Washington, D.C., have put out a series of edicts and laws to hold Wells Fargo and its executives accountable. In June, the Los Angeles City Council moved to divest city funds from Wells Fargo, marking yet another blow to the bank.
These steps, while important, go only so far in protecting the people whose lives and livelihood depend on trustworthy banking. As reports from the National Employment Law Project found, the same system of high-pressure sales goals that helped Wells make fistfuls of cash from illegal accounts exists at nearly every other major bank. In just the past eight years, my family and I have been cheated by both Wells Fargo and Bank of America — and, sadly, that’s not uncommon.
After flying under the radar, Los Angeles is now poised to take a meaningful step that could prevent another Wells-sized scandal, not just punish the perpetrators of the last one. It might not make for the flashiest headline, but good policymaking isn’t always glamorous.
This summer, City Councilman Paul Koretz and the City Attorney’s Office are advancing a new policy to show banks that rely on aggressive sales goals — the very tactics that created the Wells scandal — that these practices aren’t welcome in our city.
Koretz’s motion, which is making its way through the City Attorney’s Office, bans banks that rely on aggressive sales quotas from doing business with the city of Los Angeles. The new rule would require that banks do not engage in practices that harm consumers by amending our city’s Responsible Banking Ordinance.