Wells Fargo scandal prompts Los Angeles to crack down on banks that do business with city

When the city of Los Angeles shops around for a new bank next year, it will ask institutions to promise that they do not engage in sales practices that harm consumers, a move spurred by revelations of widespread sales abuses at Wells Fargo & Co.

The City Council on Tuesday approved a motion from Councilman Paul Koretz requesting that the city’s Office of Finance require banks bidding for the city’s business to certify that their practices are not predatory, though it’s not clear what specific practices might be banned.

It also voted to ask the city attorney’s office to draft an ordinance that would amend the city’s responsible banking ordinance to include more protections for whistle-blowers who report suspected illegal bank activity to authorities.

“It’s my hope and goal that the steps we’ve taken today will protect the financial health of our city and stop banks who receive large amounts of taxpayer dollars from ripping off Los Angeles residents,” Koretz said in an emailed statement.

Read more at The Los Angeles Times