Seattle’s city’s council voted on Tuesday unanimously in favor of cutting banking ties with Wells Fargo and avoiding any new investments in the company’s stocks and bonds.
Seattle’s break-up with Wells Fargo was mostly driven by anger over the bank’s role as one of more than a dozen lenders helping to finance the controversial Dakota Access Pipeline. The oil pipeline has been given the green light by President Trump, despite fierce opposition from Native Americans and environmentalists.
Wells Fargo had already fallen out of favor in Seattle due to the fake account scandal that has rocked the bank. Seattle had scrapped a $100 million bond deal with Wells Fargo in response to the millions of fake accounts and alleged mistreatment of workers at the bank.
The new legislation passed by Seattle directs the city’s mayor to immediately notify Wells Fargo it won’t renew an existing banking contract at the end of 2018. Seattle’s bank account balances with Wells Fargo average about $10 million.
Seattle is taking further action by directing city officials to refrain from making any new cash investments in Wells Fargo securities for a period of three years. The legislation does not call for divesting any investments Seattle may already own in Wells Fargo stocks and bonds.
Seattle Mayor Ed Murray supports the Wells Fargo legislation and plans to sign it, a spokesman confirmed.
Wells Fargo said in a statement that it is “disappointed” Seattle is ending the relationship but emphasized it stands “ready to support the city with its financial services needs in the future.” Wells Fargo said it’s been investing in the “diverse and dynamic” community of Seattle since 1859 and today the bank is the No. 2 small business lender in Washington State.
Tim Sloan, Wells Fargo’s CEO, defended the bank’s role in the Dakota Access Pipeline. He noted that Wells Fargo is just one of 17 banks providing a credit facility to Energy Transfer Partners, which is building the pipeline.
“We have an obligation,” Sloan said on Wednesday at the Yahoo Finance All Markets Summit. “That credit facility was properly vetted and independently reviewed within Wells Fargo. We thought it made sense.”
Dakota Access protesters have also targeted Sloan personally, convening in front of his San Marino, California house last month, according to local press reports.
Asked about the protests at his home, Sloan said the country is “very divided” but added that he’s “very respectful” of others’ opinions.
The Seattle move came just hours after the Dakota Access Pipeline was granted a critical easement in North Dakota by the U.S. Army Corps. of Engineers. The easement will allow the project to move forward by halting an environmental impact study.
The Army’s decision comes two weeks after President Trump ordered an expedited review of the pipeline, which has been the subject of a lot of controversy.
The Standing Rock Sioux Tribe is strongly opposed to the pipeline being built near its home and has warned it threatens to contaminate the tribe’s drinking water.
Seattle councilmember Debora Juarez was born to a Native American mother and is a member of Blackfeet Nation, a large tribe that has a reservation in northwest Montana.
Juarez said in a statement that Trump’s executive order advancing the pipeline “unlawfully deprives Native peoples of their rights of due process” and adds “insult to the very real injuries suffered by the Standing Rock Sioux.”
Seattle Mayor Ed Murray slammed the renewed efforts to build the Dakota Access Pipeline as a “political decision” and said the city “will not stand by as tribal citizens are treated as second class communities.”