Moving Your Money Can Have a Real Effect on Big Banks

[girl gone mad]

Moving Your Money Can Have a Real Effect on Big Banks
http://www.nakedcapitalism.com/2010/01/guest-post-moving-your-money-can-have-a-real-effect-on-big-banks.html">Naked Capitalism

People have asked whether moving your money from your giant bank to a small community bank or credit union will have any real affect on the too big to fails, given that most of their profits come from speculative investments instead of normal banking deposits.

According to the Nation, the answer is http://www.thenation.com/doc/20100201/editors?rel=emailNation">yes:

The cynics either do not understand banking or misunderstand the widespread public anger. Dennis Santiago, CEO and managing director, explained that banks compete fiercely for the “core deposits” provided by individual and small business accounts–this stable money is their preferred base for profitable lending. Take away core deposits, and bankers feel immediate balance-sheet stress. Expand the account base for community banks, and they gain greater stability and greater lending power. “Will moving your money have an effect?” Santiago asked. “And by effect, I don’t mean making a momentary political statement. I mean making a structural difference to the country’s financial system. The answer is yes.”

The Nation points out that a wide variety of campaigns to take back power are being launched from diverse sources:

A campaign launched by faith-based community organizations associated with the Industrial Areas Foundation identifies sky-high interest rates on credit cards and other lending as the ancient sin of usury. IAF groups are asking churches, foundations and local governments to withdraw funds from the usurious banks that profit by destroying borrowers. Organized labor, likewise, has launched an aggressive movement to insist on responsible investing values for the pension-fund wealth of working people, urging state treasurers and fund managers to invest for society’s interests as well as good returns.

The Nation is right. There are numerous efforts to stand up to the giant banks.

http://www.nakedcapitalism.com/2010/01/guest-post-moving-your-money-can-have-a-real-effect-on-big-banks.html">continued..

[Vinnie From Indy]

1. I wish I could Rec 10,000 times

I hope all Du'ers keep this in mind in their daily lives and suggest to their church, group or business to move their money to local community banks and credit unions.

[davidwparker]

15. I have so and support. See my signature.

[abelenkpe]

2. hope this continues to catch on nt

[AnneD]

3. If it didn't work.....

why does the expression 'run on the bank' cause bankers to shit their pants. We can do it, it will just take more folks. I think one mega bank should be targeted to serve as an example. Banks will realize the anger of the public and Congress will try to get ahead of the popular curve and get some reforms passed to make themselves look good.

A great waterfall starts with a single drop of water.

[Djarun]

4. Pick Bank 'O America and JPMorganChase!

[AnneD]

10. I think JP is the weakest....

and BOA is 2nd. I would target BOA so they could not Pooh Pooh the results. 'Oh JP was going to collapse anyway'....

[dkf]

5. This won't work for Goldman.

What is the recourse there?

[Joe Chi Minh]

6. All manner of knock-on effects, some perhaps international?

[girl gone mad]

7. It will work if the deep pockets decide to move.

I know a few Fortune 500 types and, believe it or not, they all loathe the bank bailouts. Most of them like to consider themselves self-made free marketeers, whether or not they actually are. I probably shouldn't say this, but I am in regular contact with one of the wealthiest people on the planet. While I detest his politics and business ethics in general, we agree on the need for banking reform. If he stopped doing business with Goldman, they would notice.

[dkf]

9. He ought to be leery of them after reading they were selling products they were shorting.

He needs to listen to Dylan Ratigan more. Maybe that will stoke his outrage enough to move.

[bemildred]

8. Big banks don't give a shit about you or your piddly little pile of money.

Small banks do. This is not a guarantee, but it's something to keep in mind.

[glinda]

11. husband and I met with our small Bank this week to move our piddly pile of money

out of the big bank.

[bemildred]

12. Good for you.

I'm part way there, and I intend to start working on the rest of it.

[Djarun]

13. which big bank?

[glinda]

16. wells fargo

[Djarun]

17. Wells Fargo was the last bank I had after Norwest bought them and then I went credit union.

....Is that dating me? I remember when ATM's were free, then Norwest changed to Wells Fargo and started charging customers fees for everything including ATM's and checking. That's why I switched to credit unions which did not charge fee's at the time. Getting ready to make the switch to cash and money orders because the credit unions are beginning to act just like the banks are. I will get a pre-paid debit card to do my purchases online.

[glinda]

19. good info as we are thinking of going Credit Union also

[Djarun]

20. Credit unions are much better than banks,

but are rapidly getting addicted to all of the "fees" that banks and credit card companies provide. Last summer I paid for gas at a gas pump with a debit card, I had about $100 in the account. I was only getting $10 in gas, but the gas station charged $125, which gave our account a negative balance, and then charged us $10 for the gas. We were given 2 overdraft "fees", one for the $10 and one for the $125. Sounds illegal to me. $125 was then re-deposited into our account after we pumped the gas, but not before we were charged with a second "fee". We no longer pay at the pump.

[Lugnut]

14. I dumped BofA more than five years ago.

Our accounts have been with the local credit union ever since. I pay $1.00 a month service charge for my debit card but the checking account is free including the free checks. There are no service charges on our savings accounts regardless of the balance.

[Name removed]

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