Protesters gathered outside City Hall last Thursday with a clear message for the Harp administration: quicken divestment from Wells Fargo. But according to city officials, the divestment process, though underway, will take some time.
Environmental activists have been lobbying New Haven for over a year to take its funds out of Wells Fargo, the country’s third largest bank, due to the financial institution’s involvement with the Dakota Access Pipeline. In January, the state deemed Wells Fargo a nonqualified public depository, putting pressure on New Haven and other Connecticut municipalities to move their operating funds. And now, the city is in the midst of the onerous process of withdrawing its capital from Wells Fargo and relocating it to another bank, which has yet to be selected.
“We are slowly pulling the money out and dispersing it in other accounts,” said City Controller Daryl Jones, City Hall’s chief financial officer. “We are not sitting here purposely delaying. We are doing our due diligence.”
In March 2017, the Federal Office of the Comptroller of the Currency downgraded Wells Fargo’s Community Reinvestment Act rating — which indicates how well a bank serves moderate and low-income households — to “Needs to Improve.” Connecticut Banking Commissioner Jorge Perez reported this redesignation in his Jan. 9 annual letter to State Treasurer Denise Nappier. In turn, Nappier has stipulated that Wells Fargo can no longer receive public deposits and that municipalities must review their existing deposits in Wells Fargo accounts.
“You should review your current banking relationships to determine if you have deposits which must be moved to a financial institution with a higher Community Reinvestment Act rating that is eligible to receive public deposits,” Nappier wrote in a January letter to Connecticut municipalities.
In an email to the News, Wells Fargo spokesman James Baum noted that Wells Fargo’s loan to the Dakota Access Pipeline represented less than 5 percent of the total financing for the project. And with the project now complete, he said, the bank has fulfilled its lending obligations.
Baum added that Wells Fargo is “disappointed” that New Haven has decided to withdraw its funds and that the bank stands “ready to serve the city’s financial needs in the future.
Wells Fargo is one of several banks holding New Haven funds. But all three of the city’s operating accounts — which are the most difficult accounts to relocate given the amount of money going in and out of them per day — are administered by Wells Fargo.
Jones noted that it is much more difficult for a company or city to transfer operating accounts than for a private citizen to move personal funds.
“It’s very different when it comes to any company or in this case, the city, to move an operating account to another bank account,” he said. “We’re dealing with hundreds and hundreds of transactions a day.”
He also said the process is made more difficult by the fact that the city “doesn’t have a robust staff like we’ve had in the past.”
Given these challenges, Jones said the process could take months and the city does not have a “definitive timeline.”
Despite these difficulties, Jones said the city will eventually follow through with its plan to move its operating accounts.
Geremy Schulick, a local activist with New Haven Stands with Standing Rock, acknowledged the complicated and arduous nature of the city’s undertaking, calling it “a huge, huge job” and “one of the most pain-in-the-ass things.”
Although the city’s decision to withdraw funds from Wells Fargo represents a victory, Schulick said, the campaign is far from over.
The city has not yet found a bank to move its accounts to, and Schulick hopes it chooses one with a better environmental track record than Wells Fargo.
“We have a tremendous opportunity now,” Schulick said. “We can really try to make sure that the city does it right and that it doesn’t just move its money to another bank that funded the Dakota Access Pipeline.”
Schulick recommended local community banks, like Start Bank.
Melinda Tuhus, another local activist, said the Dakota Access Pipeline is not the only Wells Fargo-funded project to be concerned about. Tuhus said the bank has financial connections to the Bayou Bridge Pipeline, a roughly $700 million, 162-mile oil pipeline in Louisiana, which could threaten ecologically fragile habitats along the Gulf Coast.
Wells Fargo spokesman Baum said the bank is not involved in any loans dedicated to the Bayou Bridge Pipeline but, “like a large number of other banks,” it has a relationship with Energy Transfer Partners, the pipeline’s owners and operators.
Wells Fargo was founded in 1852.
Max Graham | firstname.lastname@example.org