The Minneapolis City Council on Wednesday asked staff to explore ways the city could “stop doing business with financial institutions that invest in the fossil fuel industry and in projects such as the Dakota Access Pipeline,” including Wells Fargo.
The nation’s fourth largest bank, which was founded in the Twin Cities as Northwestern National Bank in 1872, took notice of the council’s action and on Thursday jumped to reaffirm its value to Minneapolis and its investments here.
“We are very proud of our 131-year, long standing tradition of serving the Minneapolis community,” John Hobot, a spokesman for the bank said Thursday. “Our highly experienced and proven government banking team remains dedicated to delivering outstanding service to the city of Minneapolis.”
The bank has 11,000 Minneapolis employees and recently spent $300 million building two office towers near U.S. Bank Stadium.
Council Members Alondra Cano and Cam Gordon proposed that city staff report back by July on how the city could end its relationship with banks like Wells Fargo. The bank handles city transactions such as utility bill payment and larger wire transfers, helps manage some of the city’s investments and loaned the city money in the form of bonds to renovate the Target Center.
A city the size of Minneapolis requires a lot of financial services, and it awards contracts to banks after a competitive process, said Mark Ruff, the city’s chief financial officer.
U.S. Bank is the lender on the Nicollet Mall reconstruction project, for instance, and Minneapolis uses four separate firms to manage investments that are often used for capital projects a year or two later. One of those investment firms is Galliard Capital Management, a Wells Fargo subsidiary.
“As we look at the ways our city invests, we want to be careful about who we are partnering with and why,” Cano said.
She objected to Wells Fargo’s backing of the Dakota Access Pipeline project and fossil fuels in general and brought up the scandal in which Wells Fargo employees opened up as many as 2 million accounts for customers without their knowledge. The scandal ultimately cost Wells Fargo CEO John Stumpf, a St. Cloud State University graduate, his job.
Cano and Gordon said the city should look at establishing a municipal bank or participating in a publicly owned banking operation. The clearest example of a publicly owned bank is the Bank of North Dakota, which was established in 1919, and handles that state’s funds and promotes agriculture, commerce and industry.
Several members of the public spoke Wednesday in support of Minneapolis ending its relationship with Wells Fargo during the public hearing before adoption of the city’s 2017 budget. The council passed Cano and Gordon’s motion unanimously.
“The potential, especially of a publicly owned bank, is worth exploring. It holds a lot of promise over economic development and job creation and increasingly building wealth within our communities and is definitely one that warrants further attention,” Council Member Andrew Johnson said.
Mayor Betsy Hodges was less committal and noted after the meeting that Wells Fargo was not mentioned by name in the motion the council passed.
“They asked a question,” she said of Cano and Gordon’s motion, “and I’ll be fascinated to see what the answer is.”