A Philadelphia city councilman has introduced legislation to remove city deposits from a major financial institution — until he hears a good reason why it should have the city’s business.
Councilman Jim Kenney’s legislation would remove about a quarter-billion dollars from Wells Fargo & Co. bank. Kenney says he’d like Wells Fargo officials to explain why it should hold the city’s money.
“We gave those large institutions taxpayer money to keep them from failing to think they could back off some of those debt-service payments or swap payments that are killing our school district and killing our city,” Kenney said.
The city and school district lost $331 million with financial institutions from participating in speculative rate management agreements also known as swaps. Kenney says he believes it’s time for big banks to come and ask for the city’s money.
“This bank has our deposits and our business since the PNC days,” he said. “We’ve never had a discussion with the new iteration of each bank that’s come forward whether it’s PNC or CoreStates or Wachovia or Wells Fargo … why we should be doing business with them as opposed to anyone else.”
A hearing for the legislation has not yet been scheduled. A Wells Fargo representative says bank officials are proud to stand on their record.