Saturday, April 9, 2011

Putting our money where our mouths are (part I)

We are sick of big banks at many, many levels.  

Maybe this subject seems out of place, but from our perspective it's all part of the same effort to re-think the way we live to make our lives and communities more sustainable.   

Most of us live our lives under the yoke of debt, locked into mortgages and school loans and business loans. Almost all of the mail I receive is for new debt opportunities; shiny credit cards or pre-written checks for big sums of money with my name on it, just beckoning to be used.  Everywhere we look, debt beckons.  

It beckons in the type of high-cost mechanized farming promoted as "efficient" by the WTO and USDA, it beckons in the hopes of buying a home beyond your needs or means and selling it for a big pay day a few years down the line, it beckons in the promise that a college or graduate degree from an elite college will put you on the path to prosperity and general bliss.

I am sick of having to comb through the legalese fine-print of the “Summary of Changes to Deposit Accounts” J.P. Morgan sends me, to learn of their new “Extended Overdraft Fee”, how they will lower the CD interests rates they promised me after the initial term has ended (He that giveth shall taketh back), and how they claim the right to refuse any deposit or credit to my account and imperiously exclaim “we…will not be liable to you for doing so even if such action causes outstanding items to be dishonored or returned”.

We will not be liable to you.  It sounds like it could be the trademark for the whole monopolistic big-bully banking industry today. As the popularity of the academy award winning documentary “Inside Job” makes clear, there are growing numbers of us out there realizing the big financial systems are not working for our interests.

How can behemoth banks sell billions of dollars of bad loans to their customers at the same time as making big money for themselves on bets that the loans would go bad?  If wiping out the savings of millions of people isn’t criminal activity, what is? 

Who will hold them accountable?  I am tired of waiting for political action, particularly by politicians and candidates that must rely on financial executives for the billion dollars of fundraising for the next campaign.  In the meantime, we pay off interest to the big banks, keep our money in their accounts, and none of it improvs the place we live in one bit.  It floats out into the digital, global market, looking for quick profits in whatever corner of the world they can be found.
But what we are most sick of is still participating in the big bank system, which means we're part of supporting the system that makes us sick.  We are guilty by association.  We're done with it.

This is the story of our experiment in holding big banks accountable; a flap of the butterfly wings we hope catches on.  We don’t want to wait for change any longer.  We want it now, on any scale we can get it.

It hasn’t always been this way with banks.  Banks were at one time seen as essential community players, not just another group of folks you had to be weary were spending all of their time discovering new ways to make as much money off of you as possible.

What has happened to the small, local independent bank?  It has been eaten up by the bigger commercial banks, with 8000 mergers between 1980 and 1998 alone that cut the number of banks roughly in half.  Since 2000, total deposit accounts in the hands of the four largest banks (Bank of America, J.P. Morgan Chase, Wells Fargo and Citigroup) has almost doubled from 21.9% to 38.6% in 2009

When you talk about this type of concentrated monopoly, what's happened is no surprise.

I can see why you would like to keep your money with one of the big banks if you’re a stockholder.  What they’re doing to the rest of us is making you money.  But I’m not a stockholder – I can’t find much to invest in that feels like a contribution to progress and it seems that the market is rigged to be turbulent, which seems like a daily heart attack and time suck.  I’m just a small guy with a measly checking account, one of millions of deposit accounts that J.P. Morgan draws from to make the type of investments that I don’t agree with.

So what are the options?  What’s better about a local, independent bank?

The most important thing is that historically, small, local banks re-invest their deposits back into the community in the form of loans to small businesses. Although small and mid-sized banks control only 22% of all bank assets, they account for 54% of small business lending, community projects, and residents trying to afford a new home.   

Sure, they’re not perfect at serving all the needs of the communities they are in, but they’re much better than the big banks. At least with a local bank I’ll know that my deposits will help strengthen the community I live in.  And by moving my money out of the big bank system, I’ll know I’m not participating in something that makes me morally sick.  Maybe it will be like a banking alka-seltzer. 

The first step is the hardest
Like Newton’s First law of Motion, the routines of our lives will tend to stay on their uniform courses unless external force is applied to them. Maybe with this one small step, we’ll be emboldened to take more radical ones. 

So we have decided to find a good, local bank to move our money to.  Its one small step in the direction of using our money to indirectly sustain the growth of our community.  Now what do we do to make it real?

We'll let you know as we take the next step...

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