Angered by J.P. Morgan Chase's local mortgage issues and the bank’s recent revelation it lost billions of dollars in the money markets, Buffalo has shifted $45 million out of the bank.
City Comptroller Mark Schroeder says he is shifting the money to First Niagara Bank and receiving a slightly higher interest rate on the Buffalo Sewer Authority cash.
He says the money being moved represents around eight or nine-percent of the cash held by Chase for a wide array of City Hall agencies at a time when a lot of cash is held for authority capital projects.
An array of groups has pushed punishment against the bank for its actions during the mortgage meltdown. The bank has lost billions in exotic financial instruments and the comptroller says it’s time for the city to take action.
Schroeder says he told local bank officials "who are responsible for the account they have with the City of Buffalo, and I did give them the courtesy call today, and they were a little speechless. But, at the end of the day, I am certain they are going to communicate to their higher-ups along the way and say listen: 'you have to be careful especially when you are dealing with municipalities dealing with people’s money, taxpayer money.'"
Schroeder says more money could be switched if it seems the bank hasn’t cleaned up its act.
