Councilman targets big banks over 'swaps'

Posted: May 10, 2013

CITY COUNCILMAN Jim Kenney is threatening to pull nearly a quarter of a billion dollars in city deposits from Wells Fargo.

Following the economic downturn several years ago, the city and school district dished out millions of dollars to end financial deals known as "interest-rate swaps." Now, elected officials are looking to help close the school district's $304 million budget hole, and Kenney says it's time big banks step up.

"They should want to help us through this school issue," Kenney said, noting that Wells Fargo is one of several that arranged bad interest-rate swaps for the city. "You would think as one of their valued customers they would want to step to the plate and say, 'How can we help?' Instead of, 'How can you pay?' I want them to come to a hearing and explain what is it about their priorities and activities that says we should continue to do business with them."

Kenney proposed a bill yesterday to discontinue depositing taxpayer dollars into Wells Fargo's coffers. Kenney said Wells Fargo is a major funder of the pay-day loan industry, and he tried in vain to get support from Council's Committee on Finance to delay renewing the city's payroll-services contract with Wells Fargo.

At that committee hearing yesterday, Councilman Wilson Goode Jr. noted that Wells Fargo is one of the leading banks in home-purchase and small-business lending.

Donn Scott, regional vice president of Wells Fargo, declined to comment.

In other news:

* Councilman Mark Squilla proposed a bill to start a pilot program that would extend the hours of operation for horse-drawn carriages to include rush hour. Currently, horse-drawn carriages do not operate between 3:30 and 6 p.m. because some said it would disrupt traffic, but Squilla said that is not the case during the summer.

* Council also unanimously approved two bills that will extend the deadline for the homestead exemption under the city's new property-tax system. One sponsored by Council President Darrell Clarke extends the deadline from July 31 to Sept. 13 and another sponsored by Councilwoman Jannie Blackwell will allow anyone who buys a house after the September deadline to apply for an exemption until Dec. 1.

Under the Actual Value Initiative, the exemption would lower the taxable value of homes by $30,000. Mayor Nutter has proposed reducing the homestead to $15,000.


On Twitter: @Jan_Ransom

Blog: ph.ly/PhillyClout

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