Los Angeles Mayor Eric Garcetti announced Tuesday that he has signed an amended Responsible Banking Ordinance that requires any bank that bids for the city’s contracts to disclose its sales goals and other potentially predatory business practices.
The amended ordinance was passed by the City Council in response to the Wells Fargo fake accounts scandal, in which 3.4 million accounts were fraudulently created by employees given aggressive sales goals. The city does the majority of its banking with Wells Fargo through roughly 800 different accounts.
“Every Angeleno should be able to share in the opportunities our city creates, and businesses that partner with the city should be held to the highest ethical standards. The Responsible Banking Ordinance will help us protect consumers and hold businesses accountable for unscrupulous practices,” Garcetti said.
The amended ordinance will require banks to certify whether they are in compliance with all applicable consumer protection laws; whether they set or allow individual or branch-level goals or requirements for the sale of a consumer financial service; whether they consider the quantity of an employee’s sales of consumer financial products and services as a basis for the employee’s advancement, discipline, termination or compensation; and whether they have policies, protocols and training in place at both the employee and management levels to help prevent the abuse of sales of consumer financial services and products.
“We’re pleased by the mayor’s decision to sign an amended Responsible Banking Ordinance that makes Los Angeles a leader in holding our country’s financial industry accountable,” said Maria Loya, the Los Angeles policy director for the Committee for Better Banks. “Customers deserve to know the truth about the predatory practices and abusive working conditions at their banks that could hurt their communities. Today’s victory shows workers, consumers advocates and allies standing together can make a real difference and we hope this achievement inspires others across the country to take action.”
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