By Molly McCluskey
How many banks does Skagway need? And in the era of modern, mobile banking, is a brick and mortar storefront necessary? The town assembly wants to find out. Last week they passed a motion to look into bringing an Alaska-based bank or credit union to serve the town’s year-round residents, as well as the numerous international corporations that do business in this unique tourist destination.
“I believe having more options, particularly if we can find an Alaskan bank that understands some of the challenging opportunities in Alaska, it could be more responsive for the people who live here and do business here,” Assemblymember Orion Hanson told me. “Raw land purchases, boat loans, or other Alaska-centric business opportunities that maybe don’t fit into the paradigm of things that happen in the Lower 48.”
Things that happen in the Lower 48 include a string of scandals for Skagway’s sole bank’s parent company, Wells Fargo. In December, 2022, federal regulators ordered it to pay $3.7 billion for ‘illegal activity’ including repeatedly misapplying loan payments, wrongfully foreclosing on homes, illegally repossessing vehicles, and charging surprise overdraft fees. In August 2023, the bank agreed to pay $125 million in fines to the SEC after bank employees were caught using personal texts and emails to conduct business.
These controversies were just the latest in a history of predatory banking that included scamming Navajo elders, fraudulently overcharging small businesses, creating millions of savings and checking accounts for customers without their approval; holding fake job interviews with Black and female candidates after posts had been filled; and illegal retaliation against a whistleblower who reported potential fraud.
Despite these controversies, many Skagwegians do bank with Wells Fargo, drawn by the local staff, the need for in-person banking, including depositing cash, and the fact that it’s the only game in town.
“This is nothing against Wells Fargo, they have great staff here locally, I do most of my banking with them as many people in town do, but there may just be a way to have more options for folks,” Hanson said. “We want someone who’s really focused on our climate and business market.”
When given the opportunity to address that concern directly, that Wells Fargo isn’t receptive to the specific financial needs of Skagwegians, the Alaskan media representative for Wells Fargo, (based in San Diego) forwarded the request to Ruben Pulido, the executive director for Wells Fargo Communications for the Pacific and Mountain regions (based in San Francisco).
Without addressing boat loans and non-traditional mortgages, Pulido instead wrote via email;
“Branches play an important role in the way we serve our customers in combination with our online and mobile channels and ATMs. Our branches are a place where customers can meet with a banker for advice and guidance and have a meaningful financial health conversation to help them reach their goals,” Pulido responded. “Today’s branch visit is about deepening our customer relationship, where customers engage in financial checkups with bankers to create and fine-tune long-term financial goals.”
Opening a second financial institution in Skagway, even one designed for Southeast Alaskans, is not without its challenges. But there are opportunities for one willing to try.
“A new bank may need customers before they’re willing to open up a brick and mortar, and the city could do a lateral transaction that doesn’t necessarily cost us any more to put some of the portion of our general checking in there,” Hanson said. “The bigger challenge of the brick and mortar banking would be physical space. Housing, commercial buildings in general is in high demand, so finding a suitable spot might be as big as challenge as anything else.
Helen Mickel, the president and CEO of Ketchikan-based Tongass Federal Credit Union is aware of the challenges but says that she has long wanted to expand the credit union’s presence in Skagway, either through a branch or community microsite.
“The tricky thing with Skagway is the size of the community and that you already have a financial institution,” Mickel said. “We try to only go where there isn’t a financial institution but we’ll also go where there isn’t a credit union. We truly believe that credit union services are extremely valuable to the health and well being of consumers. We go where we’re needed.”
Mickel said that Skagway’s size means it couldn’t likely support a full Tongass branch, at least at first, and expressed concerns about hiring, and housing.
“We would strongly look at coming to Skagway if there was an organization that could provide us with a small office space,” Mickel said. “We would really have to start off with a microsite and see where it goes from there.” She points to their Metlakatla branch, which began as a microsite and is now a full brick and mortar location.
In the meantime, residents who bank outside Skagway will continue to have mobile options, branches within ferrying distance, and other, if less convenient, options than banking in town.
As the Assembly begins their research, Skagway Spirits Distillery CEO Janilyn Heger, who banks with Wells Fargo, urges caution. “If you’re doing business in Skagway you really need to have a local bank account, especially if you’re depositing cash,” Heger said. “It would be great to have another option but the last thing we want to do is run off Wells Fargo. Then we’d really be in a mess.”