Since the big corporate banks contributed to crashing the economy in 2008, news sources report that they’ve been rewarded with bailouts, tax breaks and executive bonuses, while American workers have lost jobs and homes. There is little wonder that many Americans—and now, institutions and local governments—have been closing their accounts at these corporate banks and transferring the money to community banks and credit unions.
The intent is to send a strong message about responsibility to government and Wall Street, while supporting institutions that genuinely stimulate local economies.
The first Bank Transfer Day, last November, was publicized over five weeks, largely through social networks. During that period, credit unions received an estimated $4.5 billion in new deposits transferred from banks, according to the Credit Union National Association.
Citizens are calling for financial institutions to be accountable, encouraged by the popularity of the Move Your Money campaign. Schools, churches and local governments across the country have been transferring large sums, or at least considering doing so, in order to invest in local economies instead of Wall Street.
Last year, the city of San Jose, California, moved nearly $1 billion from the Bank of America because of the bank’s high record of home foreclosures. City council members linked foreclosures to lost tax revenue, reduced services and layoffs, and urged other U.S. cities to follow their example. The Seattle, Washington, city council responded to the Occupy Wall Street movement by unanimously passing a resolution to review its banking and investment practices, “…to ensure that public funds are invested in responsible financial institutions that support our community.” Officials in Los Angeles, New York City and Portland, Oregon, are discussing proposals that address how and where city funds are invested. Massachusetts launched the Small Business Banking Partnership initiative last year to leverage small business loans, and has already deposited $106 million in state reserve funds into community banks.
Student activists and the Responsible Endowments Coalition are urging colleges and universities—some of which have assets comparable to those of a town or city—to move at least a portion of their endowments from Wall Street. The Peralta Community College District, in California with an annual budget of $140 million, has done just that. The district’s board of trustees voted unanimously last November to move its assets into community banks and credit unions.
Churches and faith organizations are moving their money, too. Congregations in the California interfaith coalition LA Voice vowed to divest $2 million from Wells Fargo and the Bank of America, ending a 200-year relationship with the big banks. The Most Holy Trinity Catholic Church, in East San Jose, pulled $3 million out of the Bank of America and reinvested the funds into Micro Branch, a division of Self-Help Federal Credit Union designed to assist underserved communities.
Moving money to where banking practices and investments are transparent is the most effective action. Oregon Banks Local represents small businesses, family farms and community banks. It offers a website tool that ranks local banks and credit unions on such criteria as where they are headquartered, jobs created and the extent of local investment, showing which financial institutions truly serve local communities.
“People from all walks of life are angry at the banks,” says Ilana Berger, co-director of The New Bottom Line, a national campaign that promotes moving money from Wall Street. But the broad appeal of this grassroots movement toward financial reform is based on more than anger or strategy. “It’s a way to move our money to follow our values,” says Berger. “It’s an opportunity to really protest against the banks, but also a way to show what we want them to be.”
Freelance writer Rebecca Leisher originated this article as part of “9 Strategies to End Corporate Rule,” for the Spring 2012 issue of YES! magazine.