Council’s unanimous approval of Responsible Banking Ordinance follows citywide mobilization of bank workers, city residents and consumer advocates Bank workers and consumer advocates call on LA Mayor Eric Garcetti to sign ordinance into law immediately
LOS ANGELES – Today, Los Angeles bank workers, residents and consumer advocates joined Councilmember Nury Martinez in a rally to celebrate City Hall’s unanimous passage of a groundbreaking amended Responsible Banking Ordinance that requires any bank that bids for the city’s $17 million taxpayer-funded contracts to disclose its sales goals and other potentially predatory business practices. The rule follows efforts by Los Angeles bank workers, residents and consumer advocates to hold banks accountable for a spate of unethical behavior, and makes Los Angeles the first city in the nation to compel transparency from banks about their sales goal tactics and employee compensation.
Speaking on the steps of City Hall, workers, advocates and their allies also called on Los Angeles Mayor Eric Garcetti to move swiftly on signing the amended ordinance into law.
“We took power away from big banks and their army of lobbyists and gave it back to the people of Los Angeles,” said Ruth Landaverde, a Los Angeles-based member of the Committee for Better Banks and a former Wells Fargo and Bank of America worker. “For too long, too many banks have gotten away with cheating customers and abusing workers with unethical sales goals and predatory practices. This rule is the result of advocacy from thousands of Los Angeles bank workers and residents and serves as a blueprint for cities across the country that want to wipe out big bank behaviors that prey on working families.”
“I don’t want to worry about whether my bank is being honest about predatory practices that could leave my family worse off,” said Javier Sarmiento, member of Alliance of Californians for Community Empowerment (ACCE). “I’m glad that Los Angeles is standing up to demand the transparency that consumers deserve from the financial industry.”
The new rule builds off a motion originally introduced by Councilmembers Paul Koretz and Paul Krekorian, with critical support from Councilmembers Nury Martinez and Marqueece Harris-Dawson, and requires financial institutions to certify whether or not they:
- Set or allow individual or branch-level goals or requirements for the sale of a consumer financial service;
- Consider the quantity of an employee’s sales of consumer financial products and services as a basis for employee advancement, discipline, termination or compensation; and
- Have policies, protocols, and trainings in place at both the employee and management level to help prevent the abuse of sales of consumer financial services and products.
“This rule sends a clear message that we will not stand for business as usual when it comes to predatory bank practices that target our most vulnerable families,” said Councilwoman Nury Martinez. “If banks want to do business with Los Angeles, they will have to prove that they are ethical, responsible, and committed to respecting our residents.”
“I’m proud to stand with the frontline bank workers and their allies who have fought to make their voices heard and demanded the quality service their communities deserve,” said Tom Runnion, Vice President of CWA District 9. “Today marks a critical victory for families and workers across Los Angeles and is an important step in bringing greater accountability to our financial industry.”
It’s time for big banks to put customers and those who serve them first, Banks workers are on the frontlines serving their community every day, but for far too long big banks . “I’m proud to stand with the frontline workers, advocates and community allies
Since the Wells Fargo fraudulent account scandal came to light in 2016, front-line bank workers organizing with the Committee for Better Banks (CBB), Communications Workers of America (CWA) and the Alliance of Californians for Community Empowerment (ACCE) have exposed predatory sales practices that force workers to choose between consumers’ best interests and getting paid a living wage. Los Angeles workers and consumers have delivered thousands of petition signatures to City Council calling on their elected representatives to stop giving millions of dollars in taxpayer money to banks that use predatory sales goals and other harmful banking practices.
The amended ordinance that passed City Council today also follows stronger guidance from the Los Angeles Community Review Board on Responsible Banking, which issued recommendations late last year to reform the city’s banking system. Through its investigation and a public hearing opened by Rep. Maxine Waters, the board advised that Los Angeles prioritize banks that “do not use sales performance as a factor in discipline or termination” for city contracts and create a Responsible Banking Ordinance that “promotes strong environment, social, and governance principles.”