East Orange considers divesting all city funds from Wells Fargo

EAST ORANGE, NJ — The East Orange City Council may be in the middle of reviewing Mayor Lester Taylor’s revised proposed Calendar Year 2017 City Budget, which he reintroduced at its meeting on Monday, March 27, but the governing body is still trying to find ways to help homeowners facing mortgage foreclosures.

With this in mind, the council announced on Monday, April 24, that East Orange is considering severing ties with Wells Fargo in the wake of recent allegations that the banking firm had engaged in practices not in its customers’ best interests.

Newark Mayor Ras Baraka professed similar concerns at a home mortgage foreclosure forum and workshop at Essex County College, sponsored by Women in Support of the Million Man March founder Frericka Bey on Wednesday, Jan. 25, which Orange City Council President Donna K. Williams attended.

“The city of Newark is helping Newark residents with underwater FHA mortgages,” said Baraka on Wednesday, Jan. 25. “This program allows residents to secure loan modifications and remain in their homes. The program provides for loan remodifications for occupied homes. NJ Community Capital is working with the city to manage and implement this program.”

According to Baraka, “Bottom line: We will not put our money into banks that don’t invest in our neighborhoods and that cause families across America to lose their homes.”

“The city … office had hundreds of millions of dollars in Wells Fargo; we’ve already begun to move all of our money out of Wells Fargo and, probably by March or April, we will have a zero balance,” Baraka said. “We’ve already moved our money out of Wells Fargo and put a lot of it in TD Bank and City National Bank.

“Ultimately, it takes us time to move large sums of money out of these banks because these banks take care of our payroll, take care of our property taxes, they take care of our water bills. You can’t just go in a bank and pull $300 million out of it without having a problem or they’ll make a problem for you as well. You’ve got to meet payroll; people have to get their water bills and tax bills paid. So they take care of our accounts.

“So we’ve gradually moved our money out of Wells Fargo for several reasons. One is the foreclosure issue. But also because of things that have been happening nationally around Wells Fargo anyway. So we’ve already moved in that direction and we should be done with that in a little while.”

But divesting from Wells Fargo is only the first step, Baraka said.

“The real issue is that it’s Wells Fargo today, it’ll be another one tomorrow,” said Baraka. “At the end of the day, we’re jumping around moving our money here and there. I mean, ultimately, we need to figure that out about some of these financial institutions and we begin to put our money in public accounts that we create for ourselves.”

So it’s no surprise the East Orange City Council is considering its next move with regard to Wells Fargo.

“We’re considering sending a message to Wells Fargo and its shareholders that business as usual is no longer acceptable,” East Orange City Council Chairman Ted Green said Monday, April 24. “For many years, the residents of East Orange have been subjected to predatory lending and aggressive foreclosure practices by Wells Fargo. The consequences of stolen wealth have been devastating to families of East Orange.”

First Ward Councilman Chris James agreed it is almost time for East Orange to take the next step in fighting the home mortgage foreclosure crisis that’s been happening across the country for almost a decade. Last year, he joined the mayor and other community stakeholders in announcing an initiative to stop helping Wall Street bankers profit from the financial misery of municipalities with high rates of foreclosure by asking them to sell floundering mortgages to local community groups, instead of packaging them for profit to foreign investors and others.

This year James, Green and the rest of the council are exploring options against Wells Fargo. A spokesman for the national bank could not be reached for comment about municipal divestment actions that are already under way or being considered by cities such as East Orange and Newark.

“Wells Fargo has a demonstrated track record of causing harm to communities in pursuit of profit,” James said Monday, April 24. “We may be the first city in New Jersey to announce our divestment from Wells Fargo, but we part of a growing movement of local governments across the country taking similar action. It is my sincere hope that what we have done in East Orange will encourage other cities in New Jersey to divest from a bank that has caused immeasurable harm to New Jersey residents.”

Trina Scordo, executive director of the grassroots community organization NJ Communities United, said it is ready to help elected officials and struggling homeowners in East Orange, Newark, Irvington and anywhere else they are needed. She also said divesting from Wells Fargo sounds like a good idea.

“Fake accounts, aggressive sales goals, investments in dirty energy and blatant disrespect for sovereign rights are just a few more examples of Wells Fargo’s profit-at-any-cost approach to business,” said Scordo. “Unfortunately, this type of behavior is endemic of many big banks. The leadership by the city of East Orange, and the national movement of other municipalities divesting from Wells Fargo, is what is needed to demonstrate that our communities want — and in fact are demanding — a new system for how banks operate.”