Why I Moved My Money
by David Kaner | University of Chicago
On September 29th, Bank of America announced it was introducing a $5 debit card fee. Just like that, a movement was born. Regular people fed up with the unethical practices and poor customer service of corporate banks organized Bank Transfer Day and began encouraging anyone who would listen to move their money to local credit unions.
Listen we did. Between late September and Nov. 5th, 650,000 people opened accounts with credit unions, more than had done so in the previous year. On Nov. 5th, 40,000 Americans moved their money, and in the days that followed the surge continued. By some accounts, credit unions might gain up to a million customers thanks to the transfer movement.
I’m not naïve. As I signed my name to open an account at my university’s credit union this week, I was well aware this would not take down Citibank. The losses of the last 6 weeks are too small, and too spread out among the different banks, to severely damage their balance sheets. Some commentators have even guessed that because the accounts being moved are generally low value it may actually financially benefit the banks, though others say that in the long term the loss of customers will sting.
Whatever the direct economic impact, it’s not about crippling the corporations in one fell swoop. It’s about restoring an element of democratic control over American capitalism. If our money-drenched political system is incapable of policing itself and reigning in its patrons on Wall Street, we the people have to do it ourselves. Part of that is speaking out and moving the debate forward, as Occupy Wall Street is doing. Another avenue, which Bank Transfer Day represents perfectly, is using the power of the pocketbook. Bank of America, scared of further damaging its reputation and losing more customers (it lost the most of any bank recently), backed off the debit card fee earlier this week. It was a reminder that, in a consumer-based society, our collective choices can actually have an impact.
We know what we’re voting against, but what are we voting for? Like most people, I moved my money not because of a specific fee, but in protest against the practices of the financial industry as a whole. In a credit union, I found a model of business the way it should be: regulated, accountable and morally constrained. While big banks are run by boards far removed from the people they serve, credit unions are governed by their customers. Since they are limited to lending to their members, your neighbors, credit unions can neither gamble money in questionable Wall Street schemes nor invest in large-scale environmentally and socially destructive projects overseas. In fact, many credit unions focus exclusively on community development, keeping money in the immediate area. By joining a credit union, you are in a sense investing in your own neighborhood, rather than the people foreclosing on it.
I’m not claiming that the entire world financial system can or should be replaced with community banking. Multinational banks have power to leverage billions of dollars in capital in a way credit unions do not. By taking our money out of them, we’re simply saying that power should be used in constructive ways. Citi, Chase and BofA are being reminded they’re not the only game in town. If they want to win me back, it’s going to take a concerted effort on their part to be responsible members of the local, national and global communities. If not, I’m more than happy continuing to take my business elsewhere.Originally from New York City, David Kaner is a Law, Letters and Society and Political Science major at the University of Chicago. He also writes for the Chicago Maroon.