Some St. Pete officials ponder pulling money out of Bank of America in favor of smaller bank
St. Pete City Council member Steve Kornell will ask his colleagues not to renew a contract with Bank of America on Thursday. His push comes after a resident complained that Bank of America was not abiding by the foreclosure rules it agreed to. It also coincides with a related effort to invest taxpayer dollars into local banks.
â€œI happen to have a new business item that was referred to committee asking that a percentage of our deposits be referred to local banks.
Kofi Hunt, a St. Petersburg activist said severing ties with Bank of America is a step in that direction.
â€œWeâ€™re looking for someone to build a way forward, someone to be investing in us, someone to be building a way for our potential to be unleashed and I think that when you talk about taking the hundreds of millions of dollars that St. Petersburg has and putting it in a local community bank, that goes a long way to helping a lot of people here in the city.â€
Five major banks, including Bank of America agreed to a multi-billion dollar settlement with 49 states after being sued for improperly handling foreclosures. The settlement requires those banks to stop foreclosing on properties where the customer is in the process of getting a loan modification. It also requires banks to provide a single point of contact for customers facing foreclosure. Kornell said the nearly $500 million operating budget is an awful lot of money to invest with a company that may not be following those rules.
â€œHad I been able to talk to somebody and have them just call the citizen, that would have been great to me. But they were so snotty to me â€“ so uncooperative â€“ and then the number I was given for the person, I called for a week in a row and the person didnâ€™t even return my call. I didnâ€™t get a chance to leave a message, nobody even answered at that number and if thatâ€™s how theyâ€™re treating our citizens, I have a big problem with that.â€
Even if other city council members want to renew a contract with Bank of America, Kornell is hoping to delay signing anything until the board has a chance to vet their local options. And heâ€™s not alone. Council chair Karl Nurse wonâ€™t vote to renew the contract.
â€œWell, to me the logical thing to do is to try to use our banking policies that are aimed at is this bank lending to local businesses and what are they doing in terms of lending to homeowners across the economic spectrum and Iâ€™m not sure that Bank of America is necessarily any better than the others, but weâ€™re not even asking the question at this point.â€
And Nurse agrees that part of the question should be - where can the city keep its money that will be best for residents and local businesses?
â€œI am a successful businessman today because a local bank gave me a line of credit just as my company broke even so when I asked him why he said itâ€™s because â€˜I thought you would make it.â€™ This is a few years later â€“ and I asked them if they could do that today as they were taken over by a bigger bank and they said of course they couldnâ€™t do that today.â€
The push to start investing some city funds into a community bank was referred to a committee and isnâ€™t scheduled to be discussed as of yet. But regardless of who the city banks with, mayoral candidate Rick Kriseman said officials do need to be asking some questions.
â€œAre you lending to those small businesses that are trying to locate or continue to be able to keep their doors open? How are you treating those homeowners who are doing everything they can to make their mortgage payments but might be interested in trying to restructure â€“ are you working with them?
A spokesperson for Bank of America did not respond to requests for comment before broadcast.comments powered by Disqus