New York City mayor Bill de Blasio and comptroller Scott Stringer has decided to suspend dealings with Wells Fargo owing to the bank’s failure to meet the requirements under the Community Reinvestment Act.

The move was initiated after the bank received a Federal Community Reinvestment Act (CRA) rating of “needs improvement”. Officials said that the ban would be reconsidered only if the bank raises its rating.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Exemption in the case would be affordable housing financing that directly benefits the city residents, officials added.

The decision would bar agencies from signing new contracts with Wells Fargo or renewing their existing contracts with the bank. Wells Fargo would also be restricted from running the city’s bond sales for a year.

“The rules are very clear: if you fall below ‘satisfactory,’ we will no longer do banking business with you. I encourage Wells Fargo to quickly clean up its act and do right by the millions of customers who trust the bank with their savings,” de Blasio said.

New York hold around $227m in Wells Fargo accounts, and also is a trustee to the New York City Retiree Health Benefits Trust that has nearly $2.6bn in assets.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

“What happened at Wells Fargo was a fraud – and there should be consequences. We need to send a message to this bank and the broader industry that ethics matter. Public trust is a must – and accountability is non-negotiable. That’s why we plan to take action,” Stringer stated.

The latest move comes as another blow for the US banking major in the recent times.  In 2016, the bank was penalised by US regulators for illegal sales practice of secretly opening unauthorised deposit and credit card accounts.