Good news! Thanks to action by Council Member Grosso, the DC Council is funding a public bank feasibility study in the city’s budget for next year. His request went to the Committee on Business and Economic Development chaired by Council Member McDuffie. DC Public Banking Center is in full support of this initiative. Why is the Council taking action now?
The Wells Fargo fiasco has brought attention to the for DC government to find a better way to do its banking. In 2016, Wells Fargo was forced to admit systematic illegal activities opening new bank accounts for existing customers without their permission. Legal actions by customers, regulatory agencies, and former employees have resulted in hundreds of millions of dollars in settlements.
In March 2017, Wells Fargo failed a critical review of its community lending activities under the Community Reinvestment Act, a test passed by 99% of all financial institutions reviewed. In response, several cities around the country have ended their banking relationships with Wells Fargo.
DC Council Members Grosso, Bonds, Nadeau, and Allen co-introduced (Council Member Gray co-sponsored) this resolution asking the Office of the Chief Financial Officer (OCFO) to re-evaluate the city's banking business relationships with Wells Fargo and determine if it is appropriate to continue or terminate these contracts.
The resolution would also ask the OCFO to study a possible new public banking system. The resolution has been referred to the Committee on Finance and Revenue chaired by Council Member Evans, where no action has taken place.
Now, Council Member Grosso added funding through the FY 2018 budget process for the Department of insurance, Security, and Banking (DISB) to conduct a feasibility study for a public bank. Council Member McDuffie's Committee on Business and Economic Development agreed to include the feasibility study funding in the budget recommendations to the full DC Council.
The FY 2018 budget is expected to be finalized in the coming weeks, so now is the time for public banking advocates to contact DC Council Chairman Phil Mendelson and other Council Members to let them know you support funding a feasibility study for the public bank.