In light Wells Fargo's banking scandal, the City of Seattle will no longer work with the bank as a lender on a $100 million bond financing for Seattle City Light.
>> Related: 5,300 Wells Fargo employees fired for creating unauthorized accounts
City of Seattle mayor Ed Murray, council president Bruce Harrell and finance and budget committee chair Tim Burgess signed the letter, saying they believed that Wells Fargo was socially responsible with its banking practices.
In the letter, the city leaders stated that the $100 million bond financing for Seattle City Light was on track to close this month.
Wells Fargo has faced weeks of scrutiny since federal regulators announced that it created two million fake accounts, most likely to meet sales goals.
>> Related: How do you know if you were a victim of a fake Wells Fargo account?
The leaders demand that in order for the bank to re-establish a relationship in the future, it must provide detailed information on how it intends to rectify the situation.
KIRO 7 News obtained the letter the leaders wrote. Read it below:
As you know, following a competitive process. Wells Fargo was awarded a contract in 2013 to provide banking services to the City of Seattle. While this contractual relationship has met the City's banking needs, we were extremely disappointed to hear of the alleged unethical and likely illegal conduct that Wells Fargo has acknowledged engaging in.
Wells Fargo's practice of opening accounts in customers' names without their knowledge or approval is reprehensible, particularly in that it appears this strategy was not only condoned by management, but encouraged. Such a betrayal of the public trust is completely unacceptable. Your organization's underhanded practices greatly harm not only the customers who have been shouldered with bogus fees and unfairly reduced credit scores through no fault of their own, but also your own reputation and relationship with your institutional customers, including the City of Seattle.
The people of Seattle expect far better from the City's business partners. In light of this, and effective immediately, we have concluded that we cannot continue to work with Wells Fargo as lender on the $100 million bond financing for Seattle City Light that was on track to close this month. The City and its taxpayers must trust the practices and integrity of the institutions that handle our public funds.
If we are to consider continuing a relationship in the future, it is essential that you provide us with detailed information about how you intend to rectify this situation, make reparations to those harmed, and ensure something like this never happens again.
Wells Fargo released the following statement to KIRO 7 after we broke the story of the city's letter:
Wells Fargo is disappointed that the City of Seattle has decided to cancel our investment in its municipal light and power revenue bonds facility, which would have used the bank's very strong balance sheet to help the city manage its capital.
We are proud of the support we have diligently and professionally provided the city as its operating bank since 1999 to support its government, communities, and residents. Our highly experienced and proven government banking, securities, and treasury management teams stand ready to continue delivering outstanding service to the City of Seattle.
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.