Posted by on Nov 10, 2018 in Featured

Divestment Activists Seek to Cut Ties with Wall Street Banks and Establish a Public Bank

Divestment Activists Seek to Cut Ties with Wall Street Banks and Establish a Public Bank

November 8, 2018 Seattle, WA – In February 2017, the Seattle City Council voted unanimously to end its $3 billion per-year finical relationship with Wells Fargo due to their financing of the Dakota Access pipeline. The effort was driven by local Native organizers. Immediately following the vote, the question was asked who should Seattle bank with?

Seattle’s socially responsible banking ordinance was drafted in a way so that Wall Street banks whom fund projects like the Dakota Access pipeline, private prisons and immigrant detention center would be excluded from banking with the city. Immediately following the vote, the same coalition that secured the divestment victory started working on a new banking solution to end all relationships with Wall Street through the creation of a public owned bank.

The coalition released the following statement after consultants conducted an exhaustive feasibility study detailing the feasibility of a public bank

Councilmember Kshama Sawant (District 3) and Councilmember Mike O’Brien (District 6) released a report detailing what it would take for the City to open and operate a city-owned bank.

The report concludes that, while creating a public bank would be a complex and long-term process, the City can take several steps to better align its banking needs and goals with its values including:

  • Issue an RFP to identify a more appropriate banking partner than those found in the previous RFP process;
  • Develop non-bank investment vehicles and partnerships by looking at efforts made by other cities (such as Chicago, Kansas City and Detroit ); and/or
  • Collaborate with the state’s existing public banking effort.

Last year, my Council colleagues and I voted to fund this study to see how we can move forward and align the City’s banking with our values and goals. What we’ve learned from this study is while the path to a public bank may not be easy due to regulatory hurdles, it’s possible. I am excited for the possibility of the city banking with an institution that is consistent with our city’s values. One step identified is relaunching the financial services RFP that can allow for more appropriate banking services,” said Councilmember O’Brien.

From their financial backing of environmentally devastating projects like the Dakota Access Pipeline to their brazen discriminatory and gouging practices against communities of color and low-income people, for-profit mega-banks like Wells Fargo are clearly not the bank for the City of Seattle. My office and community activists are committed to taking the next steps outlined in this thorough feasibility study to create a public bank for our city,” said Councilmember Sawant.

The report’s authors received input from the Public Bank Feasibility Study Stakeholder Group, made up of community activists and local finance industry experts.

Some members of that stakeholder group produced a set of recommendations for the City to consider:

  • Allocate funding during the current budget session for a public bank business plan
  • Instruct the Department of Finance and Administrative Services to begin a multi-stage procurement process seeking to replace Wells Fargo with an accountable financial services provider
  • Investigate the possibilities for expanding the City’s housing levy
  • Work with colleagues in Olympia to support the State’s public bank planning process

The exhaustive public bank feasibility study shows a way forward in the establishment of a financial institution that aligns itself with the core values of the City of Seattle,” said Matt Remle, speaking on behalf of some members of the stakeholder group, including Nikkita Oliver, Alec Connon, Wayne Lau, John Burbank, Dennis Ortblad and John Repp. “This study shows that the city can establish a public bank. As cities and states across the country seek to remove themselves from the grip of Wall Street banks, this study shows a powerful alternative.”

The next step is for the City to fund a business plan. The study lays out a step-by-step approach to successfully meet legal and regulatory requirements. It addresses how the public bank, once firmly established, could lend for public infrastructure. The study is a vital step towards a public bank in support of the city’s long-term growth and prosperity,” said Dennis Ortblad, also on behalf of some members of the stakeholder group.

Councilmember Sawant will next put forth a Statement of Legislative Intent during the Council’s budget process, requesting the city’s Finance and Administrative Services department rewrite the RFP for the city’s banking needs.

Read feasibility the full study here