By Martin Kidston/Missoula Current
Members of the Missoula City Council on Wednesday directed staff to draft a resolution identifying all city accounts held by Wells Fargo, marking the first step in a push to divest from the bank as a political boycott over its questionable business practices.
Sponsored by council members Ruth Swaney and Heidi West, the resolution would state the reasoning behind divestment, including Wells Fargo’s role in the housing bubble and its financial support of the controversial Dakota Access Pipeline.
“It’s important to direct our financial resources in ways that reflect the values we have established,” said West, who represents Ward 1. “They’re a bank that was instrumental in the aggressive marketing of subprime mortgages. We still see repercussions of that today.”
The city of Missoula wouldn’t be the first municipality to divest from Wells Fargo as a political statement. Last month, Seattle and Davis, California, took the first steps to divest from the bank over its support of DAPL.
According to the referral brought forward by Swaney and West, the University of California also divested $475 million from Wells Fargo due to the bank’s ties to private correctional facilities. The California treasurer also put a freeze on financial ties to the bank after its employees opened millions of dollars in unauthorized credit card accounts to meet sales goals.
“We’re all aware there’s a lot of conflicts in the world, and we can’t take care of all problems at one time with one motion,” said Ward 6 council member Marilyn Marler. “But the reason boycotts work is because different groups work together. By the city of Missoula divesting, we’re joining other cities. Maybe it’s just symbolic, but even symbolism helps sometimes.”
Leigh Griffing, the city’s financial director, said Missoula currently has one money market account with Wells Fargo. The account currently has roughly $2.6 million invested, though Griffing said the value ebbs and flows and gains very little interest.
She said the city’s investment policy was written before the housing crisis hit.
“When we have larger amounts of cash on hand, we’ve been holding it in this Wells Fargo money market account,” said Griffing. “If the city so chooses to pass a resolution to divest from Wells Fargo, it’s an easy process.”
Griffing said the city could place its money in the Short Term Investment Pool held by the Montana Board of Investments.
“A great deal of Montana municipalities hold a portion of their funds within STIP,” Griffing said. “It’s highly liquid and it’s beneficial from a cash perspective.”
While the directive to city staff passed the council’s Administration and Finance Committee on a unanimous vote, several members voiced concern over approaching policy decisions through financial boycotts.
“If we start making policy in this format, somehow we’re losing sight of our goals,” said Ward 3 council member Gwen Jones. “Our primary obligation is at the local level. This type of policy decision gets into some extrapolations that I’m uncomfortable going that far with.”
West said the bank’s questionable business practices don’t gel with community values. She also said the city will take hypocritical actions from time to time, though city leaders do what they can, when they can.
“I am aware that one of the other financial institutions involved in the subprime mortgage was Barclays, which just helped us acquire the water system,” said West. “Each scenario has its own idiosyncrasies and reasons for why things work out the way they are.”
Divesting from Wells Fargo drew wide public support at Wednesday’s meeting. Those who addressed the committee encouraged its members to support divestment.
“Discrimination, indigenous rights, clean water and ethical business practices are ethical issues we need to take a stand for,” said Samantha Duncan.
“I don’t think we need to be a part of huge banks for our money to be safe and secure,” added Elizabeth Costigan. “I’m really aligned with the values behind divesting.”
Contact reporter Martin Kidston at firstname.lastname@example.org