HARTFORD —— Mayor Pedro E. Segarra's effort to establish a three-year contract with Bank of America, which handles most of the city's banking business, was scuttled after some city council members raised questions about the choice.
Bank of America was the top finalist for the job following a bidding process. The bank has been the city's primary bank for decades through predecessor banks, including Fleet and Connecticut Bank & Trust Co.
Through all those years, no contract with a timeframe had ever been established. Segarra's adminstration sought to establish one, but because of the length of the contract, city council approval was needed.
Treasurer Adam Cloud said Segarra withdrew the proposal this week because the issue had become bogged down in city council committees, and the city risked losing the package it negotiated with Bank of America after the bidding.
The package was favorable, including better pricing for services and a $165,000 credit for being a long-standing customer, Cloud said
Bank of America, Connecticut's largest bank, will continue in its current role but under a one-year contract, Cloud said. One-year contracts don't require city council approvals, he said.
Cloud said he doesn't plan another round of bidding in the near future because the process should encompass services for at least three years. Cloud said it is likely the contract will be extended in one-year intervals.
Segarra could not be reached for comment Friday.
Members of the city council's Working Families Party opposed the selection of Bank of America because of its involvement in the national mortgage crisis that led to foreclosures, causing local families to lose their homes.
"We sent a message to Bank of America, and other corporate offenders, that the people of Hartford will not stand for or reward corporate malpractice," said Councilman Larry Deutsch, a member of the Working Families Part, and the panel's minority leader. "Bank of America currently has a laundry list of foreclosures pending against Hartford homeowners, a list that is steadily growing because of their own bad practices."
Cloud said those issues were evaluated as part of the bidding process.
"We are entering into a contract for banking services that is separate and distinct from the activity of Bank of America's acquisition of Countrywide," Cloud said, referring to the acquisition that added billions of troubled mortgages to Bank of America's books.
Cloud said the city has had no problems with Bank of America in handling its financial affairs. But the city would evaluate, on an ongoing basis, Bank of America's record of lending, foreclosure activity and corporate citizenship in Hartford.
"If Bank of America fails to meet a high standard of corporate responsibility, they won't be doing business with the city of Hartford," Cloud said
In addition to Bank of America, five other banks submitted bids: JPMorgan, RBS, Webster Bank, Sovereign and TD Bank. Webster and TD Bank were finalists with Bank of America.
Bank of America scored the highest in a numerical formula that rated such factors as ability to meet all bidding requirements, experience in providing banking services and rating under the Community Reinvestment Act.
Reprinted with permission of the Hartford Courant.
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