OWS? Here’s who the banks should really be scared of

| October 17, 2011 | 17 Comments

Kristen Christian

The Occupy Wall Street movement seems to have caught lots of folks by surprise. Perhaps it was easy to ignore in its earliest days, but seeing mass arrests on the Brooklyn Bridge and recordings of police brutality has shined a spotlight on things. Winning last Friday’s stand-off with Mayor Bloomberg and Brookfield Properties over plans to “clean” the OWS homebase of Zuccotti Park has only reinforced the view that OWS has evolved from a fringe action to a movement to be reckoned with. Now the Washington Post is reporting that President Obama will make anti-Wall Street sentiment a key part of his re-election campaign. So maybe we should be paying attention to another fast-spreading movement that can do a lot more direct damage to the big banks.

Kristen Christian owns a small business in Los Angeles. Over the past few weeks she’s been promoting an event called Bank Transfer Day. Her idea is to get as many Americans as possible to leave their large banks in favor of smaller community banks and credit unions. November 5th is D-Day and Kristen and her sympathizers are relying on social media to get the word out. A quick glance at the Facebook page gives you an idea of how they’re doing as of right now:

There’s another movement with similar aims that’s also been getting more attention as of late. The Move Your Money Project was founded by media-heavyweight Ariana Huffington and has been around since December 2009. Its Facebook page currently looks like this:

With 156 million FB users in the U.S. fans of the Bank Transfer / Move Your Money Movements are barely detectable. Nothing to worry about, right? Wrong. Here’s why we’re watching this closely:

  • As Occupy Wall Street has shown, a few high profile incidents are all it takes for these “fringe” movements to gather big momentum and make it onto the national radar screen. For OWS that moment came last month when a New York police officer was filmed pepper-spraying a group of corralled women. A few more high profile incidents like this one and the Bank Transfer movement could make a similar leap onto the national radar.
  • Banks are great at scoring own-goals. Bank of America’s new plan to charge users $5 for using their debit card caused widespread outrage. Some lawmakers are even asking the Justice Department to investigate whether banks are colluding on these new fees. Two guesses for what this will mean for customer retention.
  • Credit unions are seeing unprecedented interest from new potential customers. Look at how this search term has been trending on Google. As you can see, the number of people using the search term “credit unions” has recently been much higher than the long-term average (represented by 1.00). It’s even higher than it was during the depths of the 2008 financial crisis when people weren’t sure whether the big banks would make it!

This interest is also being confirmed by industry trade publications like the Credit Union Times, which is reporting big jumps in traffic on CU-related sites.

  • Finally, anecdotal reports are showing that the banks, themselves, are very frightened of the damage this movement could inflict. Talking Points Memo reports the following from conversations with the Bank Transfer Day-founder:

“Several corporate-level banking institutions have sent ‘trolls’ to discourage the movement through the event page, including JP Morgan Chase, Bank of America, Wells Fargo and Merrill Lynch,” Christian wrote to TPM in an email. “I’ve encouraged all supporters to respond civilly to these bank employees.”

As proof, Christian provided TPM with screenshots of a wall post from a woman who’s LinkedIn profile indicates she is a “Teller Ops Specialist” at Bank of America.

TPM has contacted the woman and will update when we receive a response.

“When ‘trolls’ have been confronted regarding their employment with a corporate banking institution, their posts & profiles have mysteriously disappeared,” Christian told TPM.

Reports from customers who actually have gone to the bank to close their account show that bank employees are very nervous about these actions. The following comes from a user on Reddit:

“It literally took me 30 minutes to close my account. But the branch manager was freaked out because of me closing my account, she was worried her district manager would ask why I was closing my account. I then told her this, “look this isn’t anything against you or any of your tellers in this branch. I’m just not comfortable having my life savings wrapped up with Chase. I’ve read plenty of news articles about shady practices Chase has been in. I’m worried that Chase invests money in other states with bad loans. I’m not comfortable letting a for profit company take everything I saved and make bad choices. I dont [sic] want to contribute to the cause. I want to take my money, put it in my local credit union, and help them give borrowing capability to my community.”

She looked like she was about to cry. I didn’t say it in a dick tone mind you. I just felt that she would have to answer to her boss why someone pulled their entire savings out in one day, she had to know the truth.”

If the banks are taking these threats seriously then perhaps the rest of us should, too.

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Category: Banking

  • http://www.charlesfrith.com charlesfrith

    As I sensed with the arrests at Citibank. The corporate banks are nervous that a run on the banks is in the air and the quicker that happens the quicker we can get on with the job of rebuilding the system with the psychopaths out of our lives. A fresh start.


  • http://anindigodreaming.blogspot.com Maeve Indigo

    If the government won’t regulate corporate bank practices, then we as a people should, by closing our accounts and moving our money to community banks and credit unions. I fully agree with the poster from Reddit, I am not comfortable with the shady or criminal conduct of these Big Banking institutions, I don’t want my money to support their practices. I want my money in my community where those around me will receive the benefits and hold the Bank/Credit Union accountable.

  • Birojek

    Community Banks are like Ethnic Community Banks. Everybody knows your business. It enable Bankers to make better investment decisions (His father was an Alcoholic so be careful lending him money), but know wants people to know that you have $1 in the bank and living week to week. People do Gossip. Despite privacy laws people can look up Bank details.

    • Mvwindsor

      so do we want to continue with post-modern anonymity, where corruption can run wild, cloaked in anonymity by faceless corporations from far away, or are we willing to sacrifice a little of our anonymity for the sake of rebuilding our once-strong local communities that are now lost? I’m not necessarily advocating that we all go back to some fifties black and white vision of small town perfection, but I think we’ve moved so far in the other direction that it’s time to move back to the center a bit. At any rate, in a free society the consumers will be allowed to decide…. that’s the beauty of the free market.

  • http://www.getaloancanada.com Get A Loan Canada

    As a Canadian, our banking system is a little different, but if I were in the same situation as my friends to the South, I would do exactly this!


  • Lulu

    Isn’t it possible though that these credit unions that we want to believe in are also part of the whole banking scam? Can a credit union just “disguise” itself as a credit union so it won’t look so bad? I’m sure bankers have thought about this. If not, they will. They always find a loophole for everything.

    • Mvwindsor

      at least it’s a step forward… we can iron out the finer details (like whether to discontinue the fractional reserve banking system) at a later date… there’s plenty of time :)

    • http://www.financeaddict.com Finance Addict

      Caveat emptor is probably the best rule to follow in choosing any financial institution, large or small. Anyone going to a credit union may want to check out ncua.gov which is the site of the “the independent federal agency that regulates, charters and supervises federal credit unions”. Note: not all credit unions are federal credit unions; the FCUs benefit from a deposit insurance scheme similar to the FDIC scheme for banks.

    • Jessi Maria Rose

      Take a look into a credit union. I personally see where my money is going directly. The Credit Union I use (Vancity) is a open community place and generously gives information on where your money is going and gives you a choice on where you want to invest your money (most of the options are environmentally conscious, ie investments in wind farming) and gives you a chance to vote on where your fees are going to. Tens of Thousands of dollars are going toward local causes here in Vancouver and I am very proud to have switched years before all of this crazy shit! Occupy Vancouver!!!!

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  • http://www.facebook.com/people/Kevin-Brewton/100000428946231 Kevin Brewton

    OWS, BTD, MYM – these acronymns will go down in history, thanks to social media! Time to let the waves crash on and hopefully destroy the mansions built on the backs of honest pursuers of the real American Dream.

  • Anonymous

    SCARE 20.12.2012
    (Stop Corruption and Repression Effective 20.12.2012)
    Banks were given a very important privilege to create more in the form of extending credit. This function requires diligence and careful consideration in regard to individual credit risks as well as to overall credit levels in the system. The financial crisis revealed that the banks were operating at too high a leverage and with too much risk. They were used to be saved by the Central Banks and certain that in times of difficulties the Central Banks were there to save them. They were like trained dogs and their master Greenspan or Bernanke would always be there to rescue them when unforeseen difficulties arose.
    That may be true but that does not absolve them from their obligation to monitor overall debt levels in the system as well as being diligent in evaluating the debtors ability to not only service a debt but to be able to repay it over time. The banks clearly failed in this function that is the core function of banking but focused mainly on their compensation packages. The way these bankers enriched themselves in the process of driving the financial system into a wall was appalling and the average income earner was never able to comprehend their schemes but preferred to simply ignore them. Of course, the bankers explained their outrages income levels with free market principles of supply and demand, where the best simply could be hired with those kinds of benefits only. In hindsight those superior managers seem to have missed their mark considerably. The most interesting aspect of all of this is the fact that, after we have been more than 3 years in this financial crisis, the bankers continue to loot the system as if nothing ever happened.
    True to form the Central Banks “saved” the financial system by saving those great financial institutions without whom the system would have collapsed, as was argued. Hardly were we out of the danger of collapse, the banks immediately went back to their old ways and were certain that this was a problem that would occur just once in a lifetime and now all was clear again. The real problem, however, had not been addressed but had simply been muddied.
    In actuality, the losses produced of extending unsustainable levels of credit by the banks have been transferred to the public. Different ways were chosen to achieve this task in the form of free money for the banks, injection of government funds into some institutions, increase of basic money supply and so on.
    The threat of system collapse would have been labelled blackmail if it would have occurred in another setting. However the bankers were able to influence the media, the legislators and regulators in their favour with all the financial resources available to them. Nobody was made to take any responsibility and no one was taken to account.
    This represents a serious violation of the spirit of the Rule of Law that is the basis of western society. It seems that now the new rule is Might is Right. This changes many parameters in the compass of the social system within the western world. No one can be sure on what level and when one will be subjected to the financial abuse of those elites. Presently, the people in charge are trying to enhance financial repression of which one form is to keep interest rates below the level of inflation which affects mainly those that lived within their means over the past many years; another clear violation of the spirit of the Rule of Law as it transfers losses from bad investments to the innocent and decent part of the population. In addition, the increased level of government debt puts in doubt all those benefits promised by governments the world over.
    It is interesting how the banks were able to confuse the public that they are unable to grasp the actual situation. But considering their great financial resources, it seems not that much of a miracle to influence the media and the legislator and having politicians do their bidding. The question is what the heck can WE, THE PEOPLE do about it.
    Usually, we could address such things on a political level as we are a democracy, right? But it seems that the system has been corrupted by all the money sloshing around and it is extremely difficult to find any electable person that will act against those powerful interests. In addition, it will take many years until sufficient numbers of persons with the new thinking and with integrity not to be corrupted by those lobbying efforts will be elected to office that will implement the changes needed. So, what should we do? Start a revolution?
    Well, the blackmail used by the banks may be the only way to address the injustices that have occurred over the past few years. They showed us how to leverage one’s limited resources to achieve one’s goal. Therefore the following proposal to start the movement “SCARE 20.12.2012” should be seen in this context. The idea is that if by that time (20.12.2012) some serious injustices have been removed from the system, people start to withdraw their money from all financial institutions driving them into default. And it might work, because those who hesitate to support this threat may be left with no money as the banks will have to close down before all has been paid out.
    Now, what demands are made if that scenario is to be avoided.
    1. Bankers and past Bankers (all those working in the financial industry that earned in excess of $500k plus annually for more than 2 years during the past 15 years and this without any downside risk i.e. risk of financial losses, except the possibility of losing their job) have to be made personally accountable for their past activities and be removed from any such position that might directly or indirectly have influence on the money creation and lending aspects of the economy (this includes regulating agencies and politics) before 20.12.2012.
    2. Present and past regulators have to be made personally accountable for their past activities and be removed from any such position that might directly or indirectly have influence on the money creation and lending aspects of the economy (this includes financial institutions and politics) before 20.12.2012.
    3. Politicians that accept any financial support from institutions that are involved in the money creation and lending aspects of the economy will have to face a jail term of no less than 2 years without the possibility of parole.
    When these 3 points are implemented before 20.12.2012, we the public will not destroy the financial system but support the way to find back to the RULE OF LAW and away from the idea of MIGHT IS RIGHT.

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  • Jessi Maria Rose

    ps. my money comes back to me in my shares account as well. I got 25 cents on 5$ last year!

  • Anonymous

    given that the banks can leverage their funds at will, how important is the retail portion of their
    asset base/ profits ?

    • Finance Addict

      Excellent question! Just to recap for everyone, banks need to have funding on one half of their balance sheet in order to put the things on the other half that will earn them money (loans, investments, etc.). That funding can either come from retail sources (deposits from customers) or wholesale sources (money market funds). Banks that are licensed to take deposits will generally rely on this retail funding more than wholesale funding because 1) it tends to be cheaper–(have you looked at the interest rate they’re paying you on your savings account lately?) and 2) it tends to be stickier, i.e. customers didn’t used to switch banks so frequently & easily. This point of stickiness is *super* important in times of market stress when wholesale funding providers are quick to shoot a suspect bank first and ask questions later–as happened to Lehman Brothers.

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