Wells Fargo Loses $2 Billion Payroll Contract with City of Philadelphia
On Monday, the Philadelphia City Council voted to end its payroll contract with Wells Fargo for the upcoming fiscal year. Starting in July, Citizens Bank will take over the $2 billion account for city employees.
The cancellation comes after an investigation revealed that Wells Fargo employees had created more than two milllion fake checking and credit card accounts between 2011 and 2015. Philadelphia officials said the decision to end the contract was not directly the result of the scandal, but they referred to Wells Fargo’s business practices as the “antithesis of corporate social responsibility.”
The City amended the initial bill to create a six month transition period. Wells Fargo will continue to act as the depository for Philadelphia through December 31, 2017. In that time, Citizens Bank will work on new programs for low income families, minority businesses, and other groups in the community.
Wells Fargo said they were disappointed in the decision, but they “are proud of the support that [they] have diligently and professionally provided to the city in a number of capacities as its operating bank for the past several years.” The bank has already agreed to a class action settlement of $142 million to reimburse affected customers, and they plan to launch a new advertising campaign this summer to highlight the progressive actions they have taken since the scandal.