| NEW YORK
NEW YORK May 31 New York City Mayor Bill de
Blasio and Comptroller Scott Stringer said on Wednesday they
will vote to suspend doing business with Wells Fargo after a key
rating fell below a "satisfactory" level.
According to the joint statement from de Blasio and
Stringer, who hold two of the three votes on the city's banking
commission, the decision to stop doing business with Wells Fargo
follows a Federal Community Reinvestment Act (CRA) rating of
"The ban will be revisited only when the bank's rating is
raised," the statement said.
San Francisco-based Wells Fargo was caught last year in a
major scandal where staff created bogus customer accounts to
boost performance measures. As a result, cities and states have
banned the bank from its municipal banking operations,
contributing to a slump in its underwriting business, Reuters
reported earlier this month.
"Wells Fargo appreciates the continuing dialogue with New
York City and deeply values our relationship with the city. More
than four years have passed since the end of our last CRA
evaluation period and we are seeking an expedited review of the
2012-2015 exam," Wells Fargo spokesman Gabriel Boehmer told
Reuters in an email.
"We hope to restore a national CRA rating that reflects our
strong track record of lending to, investing in and providing
service to low- and moderate-income communities," he said.
The New York City Banking Commission's three members are due
to meet later on Wednesday. The third vote on the commission
belongs to Jacques Jiha, the city's Commissioner of Finance.
All three will vote to suspend business with Wells Fargo, a
mayoral spokesperson told Reuters.
Wells Fargo holds $227 million of collected city taxes and
fees and acts as a trustee to the New York City Retiree Health
Benefits Trust, currently holding its roughly $2.6 billion in
The ban will suspend the bank's role as a senior
book-running manager for the city's General Obligation as well
as Transactional Finance Authority bond sales. The ban will
remain in place for one year.
"The only allowable exemption will be for affordable housing
financing, which has a direct benefit to New York City
residents," the joint statement said.
After the expected vote, New York City agencies will be
prevented from entering into new banking services or related
contracts with Wells Fargo, as well as bar them from renewing or
extending existing contracts when they are due to expire.
(Reporting by Daniel Bases, editing by G Crosse)