Bars, churches and banks have been cornerstone institutions in many Wyoming small towns for more than a century. But what happens when a bank’s values don’t seem to match Wyoming’s – or when the bank no longer appears trustworthy?
“For the economy as a whole – for the state, localities and nationally – banks provide a stabilizer to economic activity,” said Anne Alexander, associate vice provost of academic affairs for undergraduate education at the University of Wyoming. “They provide sources of finances that smooth out the need for liquid assets and provide a safe haven for savings.”
In other words, it’s crucial that Wyoming have a healthy relationship with its banking industry.
Over the past several years, Wells Fargo has endured a number of scandals, from a 2016 incident where employees were found to be issuing credit cards without a customer’s consent across the nation to a 2018 announcement by the Consumer Financial Protection Bureau it would fine Wells Fargo $1 billion for car insurance and mortgage abuses.
Wells Fargo is Wyoming’s No. 1 bank in deposit share, representing nearly 18 percent of total deposits statewide.
Also in 2018, Bank of the West’s widely publicized decision to divest from certain fossil fuel investments ran headlong into threats of retaliation in Wyoming, Colorado and other states that rely heavily on coal, oil and natural gas extraction for revenues, according to the Associated Press.
Bank of the West is a San Francisco-based financial services company with retail banking and business banking locations throughout Wyoming.
Local banks in smaller communities are a lifeblood, Alexander said. They provide loans and savings vehicles for money. The State of Wyoming itself houses funding at these institutions, and state officials publicly stated last summer that they would consider removing its funds from Bank of the West institutions.
In January, Gov. Mark Gordon told the Wyoming Business Report he has talked with Bank of the West leadership about the relationship between the state and the bank.
“I have met with Bank of the West since being elected,” Gordon said. “They understand that they have work to do in order to address my concerns. As long as they are willing to come to the table and reconsider their position to the benefit of Wyoming jobs, Wyoming energy and Wyoming values, so am I.”
Repeated requests from the Wyoming Business Report for information from Bank of the West leadership at its San Francisco headquarters were not returned. But according to its website, Bank of the West is “interested in solutions for the environmental and climate challenges we face.”
“We believe the transition of energy from fossil fuels to renewables is the future, and our role is to continue our support of society’s ongoing energy transition and accelerate that where we can,” Bank of the West states. “To that end, we are working to exit banking relationships with companies that do not support sustainable energy transition.”
Bank of the West supports solar, wind and other renewable energy sources over fossil fuel drilling and exploration or coal mining. But according to its website, Bank of the West “may support future coal-fired power plant projects that incorporate carbon capture and storage technology, and we will continue to finance power companies that generate less than 30 percent of their energy from CFPPs.”
Alexander noted that, as with other industries, the banking industry has seen a rise in socially conscious investing.
“People want to put their assets into companies who do things they believe in,” she said. “Usually, this pertains to individuals who want to invest in things that support their social beliefs. In the case of people, nonprofits, towns, etc. taking their money out of the Bank of the West, that’s a similar situation.”
And building back trust is crucial.
Julie Fogerson, an assistant vice president of communications for Wells Fargo Bank’s Midwest region, which includes Wyoming, said her bank has taken a number of steps to address improper sales practices, and continues to make critical changes to rebuild the trust of its customers and team members.
“While we know there is still work to be done, (we are) fixing problems and building a better bank in 2019 and beyond,” she said.
Wells Fargo has nearly 280 team members who live and work in Wyoming, and in 2017, the bank gave 77 grants totaling nearly $810,000 to Wyoming nonprofits and schools.
“We contributed approximately $8.15 million in community development lending in 2017, specifically to improve affordable housing opportunities,” Fogerson said.
Teton Habitat for Humanity was the 2018 recipient of a Wells Fargo Priority Markets grant, focused on affordable housing, providing much-needed homes in Jackson. Wells Fargo is also committed to Wyoming veterans, securing a VeteranWINS grant for $25,000, with an additional $15,000 from the Wells Fargo Housing Foundation.
“The team launched a volunteer chapter in Wyoming in late 2016, which gave nearly 5,000 hours in 2017 and again in 2018. Most recently, we worked with the Red Cross to fight last summer’s wildfires with time and financial support,” Fogerson said.
In some small Wyoming communities, the banking options are few. Perhaps there is a Bank of the West branch, or a Wells Fargo, and no other option. The larger culture of the banking industry, then, matters in particular for customers – and employees – in those small communities.
“There are only a small number of physically proximate options for banks in some of Wyoming’s smaller towns and cities,” Alexander said. “In some cases, people could switch their banking to online options with other banks who match their social beliefs, but folks should also remember the fact that people work in those banks who are also local and also part of the community.
“Those who work in any given Bank of the West location also have kids that go to the local school, shop at the local grocery store, pay local taxes,” Alexander said. “That’s a trade-off people have to weigh in their decision. Should a corporate level policy that they disagree with impact how they interact with the local level of the bank?
“That’s a deeply personal decision for individuals, and should be carefully weighed by larger entities, as well,” Alexander said.