Here’s what a city needs, and could gain, from municipal banking.
In February 2017, Seattle became the first city to pass legislation to divest from a financial institution because of its role in funding the Dakota Access pipeline.
Months of rallies, public testimony at city council meetings, and protests at Wells Fargo branches across Seattle led to the unanimous vote to divest billions from the bank. Los Angeles and Philadelphia would follow. But when the time came to withdraw its money from the bank at the end of 2018, Seattle instead renewed its contract with Wells Fargo. The political decision to divest city money from one of the biggest banks funding DAPL was reversed because the city hadn’t found an alternative financial institution to house its money.
Throughout 2016 and after, indigenous activists (often referred to as water protectors) protested the DAPL at the Standing Rock camp in North Dakota. Despite opposition, the camp at Standing Rock was cleared in February 2017, and oil started flowing through the DAPL in June 2017.
But the camp wasn’t the only site of resistance. In October 2017, organizers — under the name Mazaska (“money” in Lakota) Talks — launched a campaign that urged individuals and larger entities, especially cities, to take money out of banks funding the DAPL and other pipeline projects transporting oil from Alberta’s tar sands, including Keystone XL, Trans Mountain, and Energy East.
The idea was that removing money from the banks could put a stop to the projects. The phrase “Kill the funding. Kill the pipelines” was commonly spoken by divest advocates.
Wells Fargo was one of 17 funders of the DAPL; others included Bank of America, Goldman Sachs, and JPMorgan Chase. In September 2017, Mazaska Talks reported that the divestment movement was responsible for over $5 billion being withdrawn from DAPL-funding banks. That figure included the billions divested by Seattle, Philadelphia, and Los Angeles and more than $80 million in individual accounts.
When Seattle announced it would stop banking with Wells Fargo, city officials cited the bank’s choice to fund the DAPL — as well as the 2016 customer fraud scandal — as reasons to move its money.
Moving city money out of Wells Fargo was a way for local politicians to put their money “where their values are,” said Seattle resident Matt Remle, co-founder of Mazaska Talks and a member of the Standing Rock Sioux tribe. That’s because council members would be removing city money from financial institutions that fund projects that hurt the environment and communities. Some of the banks that fund fossil fuel projects also fund private prisons, detention centers, and weapons manufacturers.
“We want an avenue through which ordinary people can access banking services regardless of income and in a way that does not engage in any exploitative practices,” said Seattle City council member Kshama Sawant, who was a co-sponsor for the divestment ordinance .
Once Seattle had committed to move its money, the city needed somewhere to move it to.
“When we were organizing around getting [Seattle] to divest, the question all along was what to do with the city’s money,” Remle said. “And our philosophy was it’s not going to be a victory to close accounts with Wells Fargo and go to Bank of America.”
Organizers saw public banks as the solution.
A public bank is an institution owned by a governmental body, funded with taxpayer money, and mandated to serve the public interest. In summer 2017, Remle and other Seattleites started advocating for the city to establish a public bank, a process that could take years.
Sawant said a public bank “would be accountable to the people of Seattle in a way that you could never hold a private bank accountable,” adding that the city could better direct the bank’s resources, like loans, to projects that support community-directed goals. Remle noted affordable housing, homelessness services, and funding for higher education as causes the city might fund.
Ultimately, the city’s historic move to divest from Wells Fargo was undermined.
