Charlotte official blasts Wells Fargo, questions whether city should do business with bank

As the Charlotte City Council prepared to vote on a routine insurance contract with Wells Fargo Insurance Services this week, council member LaWana Mayfield blasted the bank for allegedly creating more than 2 million credit cards and bank cards without customer’s knowledge.

Mayfield tried to postpone the vote, saying the city needed to “set an example of who we do business with” and that it shouldn’t reward a company that has “historically had a negative impact on majority-minority communities.”

Mayfield’s criticism of Wells Fargo was a sharp departure from the role usually played by local elected officials, who typically have seen the city’s largest employers as partners. Even during the aftermath of the financial crisis, there was little pushback against Bank of America and Wachovia/Wells Fargo for the role they played.

Other governments have cut ties with Wells Fargo over the scandal, including the states of California, Ohio and Illinois.

After a nearly 30-minute discussion Monday, Charlotte council members ultimately approved the contract.

But Mayfield was successful in starting a debate among her colleagues about whether the San Francisco-based bank should receive city tax dollars.

In September, federal regulators and the city and county of Los Angeles fined the bank $185 million for allegedly opening accounts without customers’ knowledge from 2011 through this year. Authorities said employees were pressured into opening the fake accounts to hit high-pressure sales goals.

The bank fired 5,300 employees. But outrage over the scandal continued, and chief executive John Stumpf resigned under pressure in October.

The scandal over the unauthorized accounts wasn’t related to the firm’s insurance services branch.

Wells Fargo acquired Charlotte-based Wachovia after the financial crisis of 2008. The bank employs about 23,000 people in Charlotte.

Mayfield, a Democrat, represents District 3, which covers much of west Charlotte.

“I'm not a fan of us looking to those who have financially benefited from the challenges of the community,” she said during the meeting.

She added: “When you are not a good community partner, and when you have financially hurt a good part of the community, then it's up to us to be that voice for that community. We have the opportunity to do something different.”

James Mitchell, an at-large Democratic member, seconded Mayfield’s motion to delay the vote.

Another at-large member, Democrat Vi Lyles, also voted to defer the decision. But she, Mitchell and Mayfield lost 7-3.

Lyles later voted to approve the contract. Mayfield and Mitchell voted no.

While Mayfield ripped the bank, other council members questioned whether she was going too far.

“I don’t condone what Wells Fargo has done,” said Republican Ed Driggs, who represents Ballantyne and south Charlotte. “I think it’s right that we give some serious thought to it, but it’s also right to consider the number of people the company employs, the taxes they pay. This is not some out-of-town shop.”

Peter Skilton, a relationship manager at Wells Fargo, attended Monday’s meeting. As a former Wachovia employee, he said he was “personally embarrassed” by the scandal.

“It’s upsetting to longtime employees who find this behavior abhorrent and reprehensible,” he said. “We have taken steps to address that. Our CEO retired. On behalf of Wells Fargo, I’m sorry.”

The contract covers insurance for the city, Mecklenburg County and Charlotte-Mecklenburg Schools. The city will pay the firm $265,000 a year for three years to manage its insurance.

Daniel Pliszka, who heads the city’s risk management division, said the city’s insurance needs are complex, with liabilities such as the airport, police helicopters and the Lynx Blue Line. Wells Fargo Insurance Services had handled the city’s insurance needs before.

Pliszka said the staff members who reviewed the Wells Fargo proposal all agreed it was the best.

“When Wells made their presentation, we all looked at each other and said, ‘These people get us,’ ” he said.

Democrat Julie Eiselt, an at-large member, voted for the Wells Fargo contract.

“I don’t know if it’s our job to look at the (Request for Proposal) – it’s highly technical,” she said. “A bank is made up of a lot of people and there are a lot of people in this community who work for Wells. I hate to punish everyone.”

Mayfield said it was an important discussion to have.

“If we don't start now, when do we start?” she said. “I'm not a fan of playing to the good old boy system.”

This story was originally published November 16, 2016 at 6:08 PM with the headline "Charlotte official blasts Wells Fargo, questions whether city should do business with bank."