Last week, Ariana Huffington and Rob Johnson announced a new campaign to challenge the big four banks – JP Morgan/Chase, Citibank, Bank of America, and Wells Fargo – which took hundreds of billions of dollars of taxpayer money during the bailout while cutting lending and paying millions to defeat any substantial reform of the system. When Huffington and Johnson contrasted the behavior of these mammoth institutions over dinner with friends before Christmas:
…with the efforts of local banks to show that you can both be profitable and have a positive impact on the community, an idea took hold: why don’t we take our money out of these big banks and put them into community banks? And what, we asked ourselves, would happen if lots of people around America decided to do the same thing? Our money has been used to make the system worse — what if we used it to make the system better?
In response, they launched a website, Move Your Money, that includes an extremely helpful tool where everyone can “plug in their zip code and quickly get a list of the small, solvent Main Street banks operating in their community.” In addition, Eugene Jarecki, the award-winning filmmaker behind Why We Fight, a great film about militarism in America, made a video (above) to go along with the campaign.
The idea is simple: If enough people who have money in one of the big four banks move it into smaller, more local, more traditional community banks, then collectively we, the people, will have taken a big step toward re-rigging the financial system so it becomes again the productive, stable engine for growth it’s meant to be. It’s neither Left nor Right — it’s populism at its best. Consider it a withdrawal tax on the big banks for the negative service they provide by consistently ignoring the public interest. It’s time for Americans to move their money out of these reckless behemoths.
It could also just as easily be described as a boycott of these big financial institutions.
While some have argued that the math for this campaign simply doesn’t add up, others have come to Huffington’s defense. Reuters’ blogger Felix Salmon wrote an interesting response to critics, in which he pointed out that even though many who would likely participate in this boycott wouldn’t have huge bank accounts to close, they could still have a serious impact. Banks earn tens of billions a year simply from overdraft fees and the like, which are primarily paid by their poorest customers. Therefore, as Salmon notes:
If the people with modest-sized checking accounts started leaving the big four banks for community banks and credit unions, that fee income would fall much faster than the banks’ deposit bases. That’s where the pressure from this campaign would really be felt.