Despite cancelled meeting, councilmembers discuss changing city’s banking contract
on March 27, 2012
For the second consecutive time, the Oakland City Council’s finance and management committee failed to meet because not enough members showed up. The lack of a quorum—only Councilmembers Jane Brunner (District 1) and Patricia Kernighan (District 2) were present—shelved a resolution that would have taken away the power of the City Administrator’s Office to extend the city’s banking contract with Wells Fargo past this year, instead giving the power to the city council to negotiate a new deal.
The role of banks in the foreclosure crisis needs to be examined by the council, and the city’s contract with Wells Fargo should not automatically be renewed without input from the city council when it expires at the end of this year, according to a resolution that is being proposed the offices of Councilmembers Brunner and Rebecca Kaplan (at-large). The city’s three-year deal with Wells Fargo expires at the end of this year, and the bank hasn’t supplied the city with information its requested on foreclosures and loan modifications, according to a report from Brunner and Kaplan’s offices.
On Tuesday afternoon, about a dozen members of Oakland Community Organizations (OCO), a network of community groups that is encouraging Oakland residents to move their money from large banks like Wells Fargo to community banks and credit unions, were on hand at City Hall to lend their support to the resolution. They were among some 30 members of the public who had showed up to speak about the items on the committee’s agenda.
But with only two of the four members present—Councilmembers Ignacio De La Fuente (District 5) and Desley Brooks (District 6) were absent, without a reason given—the committee could not officially meet. “This is not a committee, this is not a committee meeting,” Kathleen Salem-Boyd of the City Attorney’s Office said before walking out of the Sgt. Mark Dunakin Room at Oakland City Hall at what would have been the start of the meeting.
But Brunner said she did not think it was “appropriate to cancel two meetings in a row,” especially with community members present to speak about the agenda items. So even though the committee could not officially meet, members of the public were invited to speak about the issue to Brunner and Kernighan.
Brunner told the crowd that in the course of working with banks about foreclosure issues in recent years, the city had requested that Wells Fargo, Bank of America and Chase “provide information for Oakland on how many loan modifications have been made in the city” or on how many properties have been foreclosed upon here. But, she said, the banks either refused to disclose those numbers or gave only national numbers.
Brunner said that one way for city officials to get that information is to request it during negotiations for a new banking contract after the city’s three-year deal with Wells Fargo expires at the end of this year. “We need to find the right bank for the city,” she added.
Elinor Buchen, a legislative analyst for Brunner’s office, made a similar statement when reading from their office’s report discussing the proposed resolution. “In recent years, the city has struggled to get local information on foreclosures and loan modifications from banks, including from its current contractor, Wells Fargo,” she read. The resolution is to “ensure the city’s contract is not automatically renewed without council review and input,” Buchen said.
A few members of the public spoke, including OCO co-chairman Richard Speiglman, who told Brunner and Kernighan that it was important to “evaluate bank performance and divest funds from irresponsible banks.”
“We saw the toxic impacts of big banks like Wells Fargo in our neighborhoods, thousands of families displaced from their homes, blighted properties abandoned by banks, a sharp decline in home values and countless individuals thrown into crisis,” Speiglman said.
Kernighan said she had previously heard from the City Administrator’s Office that there are only a few banks large enough to handle the capacity of a large city like Oakland. But she said she is asking city staff to “do some serious investigation into whether there are some smaller banks that have the capacity to serve the City of Oakland,” she said.
“There are,” members of the audience responded.
Kernighan added that while the city can’t change the big banks’ “behavior in the past,” it can make sure the council has a voice in the next negotiations to “put pressure to incentivize better behavior in the future.”
“What we want to see is banks actually renegotiating loans and keeping more people in their homes,” she said.
Brunner noted that the finance committee does not meet again until April 24, and the next city council meeting at which a resolution regarding the city’s banking practices could be heard will be May 1.
Speiglman said that members of OCO heard earlier in the day that there may not be a quorum, but members wanted to show up anyways to try to “start the discussion.”
“We need to give Wells and the other banks notice that they’re not going to get away with this,” Speiglman said in an interview after the cancelled meeting. “To the extent we have control over our resources, we’re going to get them out until they clean up their act.”
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