City council member Nick Licata plans to introduce a resolution expressing solidarity with the Occupy Seattle/Occupy Wall Street protests and committing to look at the city's banking practices. The move would go a step beyond a feel-good "City Council supports free speech" resolution, but would not go as far as resolutions adopted in other cities like Los Angeles and Binghamton, NY, which have focused on Chase Bank as a primary culprit in the foreclosure crisis.
In 2008, Chase took over Washington Mutual, eliminating 3,400 jobs in Washington State. Subsequently, Chase was accused of (and sued for) using fraudulent and false documents to foreclose on home loans, including thousands of loans guaranteed by Washington Mutual and failing to act in good faith when dealing with homeowners who found their mortgages underwater.
In LA, the city council adopted a resolution in support of Occupy Los Angeles and in favor of comprehensive "responsible banking" legislation that would require the city to consider a bank's impact on the city (in terms of things like small-business and affordable housing development lending, and where branches are located) when deciding where to invest public dollars.
And in Binghamton, the city council recently voted to divest the city from its two accounts with Chase "in protest," and "deposit the funds into an account at an institution approved by the City Council" based on Chase's "lack of willingness to engage in good-faith efforts to negotiate permanent mortgage modifications" with homeowners whose homes have been foreclosed on.
Adam Glickman, vice president for SEIU 775, says his group has been encouraging local governments to divest from banks that have been implicated in the foreclosure crisis. Glickman has been working with Licata's office on the resolution.
"Shouldn't we be using our public funds to support financial institutions that are going to protect communities and housing and jobs?" Glickman says. "There's also a political statement, even if local governments aren't directly invested in Wall Street banks, of sending a message from cities and other local governments that they support the message of Occupy Wall Street and Occupy Seattle."
City finance department spokeswoman Katherine Schubert-Knapp says the city uses Wells Fargo bank for its basic banking services, including deposits of taxes and fees and payment of all city bills. State law, Schubert-Knapp says, effectively prohibits the city from using any but the largest banks; the city can use credit unions, but only for deposits up to $100,000. "It is not practical for us to use a credit union with this limitation," Schubert-Knapp says.
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