Citing chronic disruption of business by Occupy movement activists and authorities' refusal to disperse protesters, Minnesota-based U.S. Bank has closed its branch office on the UC Davis campus.

The future of the relationship – and fiscal obligations – between UCD and U.S. Bank is now in limbo, with a possible legal battle looming.

In a March 1 letter to UC regents, U.S. Bank Senior Vice President Daniel Hoke said Occupy protesters had intermittently blocked the door to the Memorial Union bank branch since January.

The bank chose to close during some of those protests.

Hoke said the situation had become intolerable, noting that customers could not access the bank and employees sometimes felt imprisoned in the branch.

UCD officials characterized the termination letter as premature, noting that UCD police have pursued legal avenues to prosecute activists engaged in allegedly unlawful obstruction.

Hoke's March 1 letter sounded an ominous tone.

He said repeated efforts to disperse Occupy protesters gathered illegally at the bank were not heeded and that "U.S. Bank has been constructively evicted from the branch. … The regents have been given notice of their default and have failed to cure it."

Hoke then said the bank is giving notice that it is terminating previous agreements and "will hold the regents liable for all losses."

UCD said it has referred the matter to outside counsel to evaluate the legal consequences of the bank's termination of its agreements.

A March 5 response letter from the San Francisco law office of Crowell & Moring says: "The bank's position and its conduct over the past several weeks are contrary to both the letter and spirit" of the agreement and lease.

However, university spokeswoman Claudia Morain said Monday that "we're still hoping to mediate it" with further talks with the bank.

In November 2009, UCD announced the 10-year agreement with U.S. Bank to provide nearly $3 million to support student services and bring the campus its first bank branch.

UCD said U.S. Bank guaranteed the university annual payments of $130,000 to $780,000 a year based on the number of banking accounts activated; the partners estimated an average annual payment of $280,000.

University officials said the agreement last year generated $167,000 for student programs.

U.S. Bank originally touted the agreement as a way to establish a relationship with young customers, a relationship that would hopefully continue when students obtained jobs after graduation. It also characterized the step as one that would enhance students' financial savvy and credit management.

"We're disappointed that U.S. Bank has indicated that it wants to leave after UC Davis worked with students to find creative financial solutions during these difficult budget times," said Emily Galindo, associate vice chancellor of student affairs.

UCD said Monday that seven ATMs around the campus continue to operate, but 2,500 student or faculty accounts in the campus branch must now be managed elsewhere. U.S. Bank has more than 40 branches in the Sacramento region, including branches in Davis and Woodland.

UCD said campus branch account holders were notified by mail that the bank had "officially closed" as of Feb. 28.

Occupy activists have argued that banks created the country's economic collapse that decimated state budgets and led to massive tuition hikes in recent years.

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