Seattle cuts lending deal with Wells Fargo, but keeps company as official bank amidst scandal

KING 5's Danielle Lee reports.

The City of Seattle announced Friday that effective immediately Wells Fargo will longer be the lender on the $100 million bonds financing Seattle City Light, due to the recent scandal involving the bank.

That contract had been set to close this month.

In a letter to the bank, Mayor Ed Murray, Council member Bruce Harrell and Council member Tim Burgess called the bank's actions "reprehensible" and "likely illegal".

The letter went on to say, "Such a betrayal of the public trust is completely unacceptable... The people of Seattle expect far better from the city's business partners."

Seattle now joins a growing number of public entities that have cut ties with Wells Fargo. California, Illinois and Chicago have taken similar action.

In a statement, Wells Fargo said it was disappointed to lose this contract with Seattle and promised to implement reforms in its retail banking to prevent a similar scandal from happening again.

"We manage the city's business in our Government & Institutional Banking division, which is separate from our retail bank. We are taking important steps to ensure that the sales culture in our retail banking business is 100 percent aligned with our customers' interests, including ending product sales goals for everyone in the retail banking business to make certain nothing gets in the way of doing what's right for customers," said Wells Fargo Vice President of Corporate Communications Ruben Pulido.

While Seattle has canceled one contract with the bank, this move in no way ends the city's relationship with Wells Fargo.

Wells Fargo is still the city's official bank, helping the city manage nearly $4 billion in revenues and payments throughout the year.

Wells Fargo obtained that contract in 2013 through a competitive bidding process.

It extends through 2018 and includes five optional one-year extensions.

Seattle has said it will consider how Wells Fargo handles this scandal as it considers continuing a relationship with the bank in the future.

Copyright 2016 KING


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