L.A. backs requirements that could freeze out Wells Fargo from city contract
Los Angeles lawmakers pressed forward Wednesday with new requirements that likely would prevent Wells Fargo from hanging on to a multimillion-dollar contract with the city.
The decision is the latest fallout from the scandal surrounding Wells Fargo, which admitted to creating as many as 3.5 million accounts without customer permission. Last year, it agreed to pay $185 million in fines and penalties to regulators, including the office of Los Angeles City Atty. Mike Feuer, who sued the bank following a Times investigation into its sales practices.
"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," said City Councilman Mitch O'Farrell, who asked city staffers to examine divesting from Wells Fargo earlier this year.
Wells Fargo is currently the primary bank serving the city, according to its finance office, and held an average daily balance of roughly $94.5 million for the city during the last budget year. That contract to provide financial services expires next summer, and the city is seeking new proposals from banks vying to get the deal.
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