In what could well be one of the more significant consequences of the Occupy Wall Street movement, Berkeley may become one of the first cities in the country to pull its assets out of a major bank — in this case, Wells Fargo — as response to its role in the financial meltdown.
The city council unanimously decided to review the feasibility of transferring its $300 million or so in assets from the bank to either a local bank or a credit union, and whether an institution of that size would be able to handle the banking transactions required of a medium-sized city.
The move, spearheaded by Councilmen Jessie Arreguin and Darryl Moore, has been in the works since 2010, ever since the city’s Human Welfare and Community Action Committee made the request, according to a staff report. Since 2004, the city has had a banking contract with Wells Fargo.
You can read the city's short narrative exploring Wells Fargo's role in the financial meltdown here, including what city officials consider the “unethical practices” of the bank for having “falsified loan documents and pushed borrowers into subprime mortgages.”
The challenge will be finding a local bank or credit union that has the infrastructure in place to handle the sizable banking needs of the city, including “payment collections, revenue sharing, and sophisticated money transfers.”
Until then, city staff will begin the process of determining what fiscal and operational impacts such a transfer of assets will have and ensuirng that public funds would be invested with a responsible institution. We'll keep you posted.