Sunday, January 03, 2010

What It Don't Get I Can't Use

Huff Po nonsense...pointless crap...nonsense...celebrity gossip - what's all this, then? Sez Arianna:
The big banks on Wall Street, propped up by taxpayer money and government guarantees, have had a record year, making record profits while returning to the highly leveraged activities that brought our economy to the brink of disaster. In a slap in the face to taxpayers, they have also cut back on the money they are lending, even though the need to get credit flowing again was one of the main points used in selling the public the bank bailout. But since April, the Big Four banks - JP Morgan/Chase, Citibank, Bank of America, and Wells Fargo - all of which took billions in taxpayer money, have cut lending to businesses by $100 billion.

Everyone around the table quickly got excited (granted we are an excitable group), and began tossing out suggestions for how to get this idea circulating.
Meanwhile, America's Main Street community banks - the vast majority of which avoided the banquet of greed and corruption that created the toxic economic swamp we are still fighting to get ourselves out of - are struggling. Many of them have closed down (or been taken over by the FDIC) over the last 12 months. The government policy of protecting the Too Big and Politically Connected to Fail is badly hurting the small banks, which are having a much harder time competing in the financial marketplace. As a result, a system which was already dangerously concentrated at the top has only become more so.

We talked about the outrage of big, bailed-out banks turning around and spending millions of dollars on lobbying to gut or kill financial reform - including "too big to fail" legislation and regulation of the derivatives that played such a huge part in the meltdown. And as we contrasted that 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?

Imagine my surprise when I found useful advice on the Blogosphere's leading source for medical quackery and Hollywood divorce tweets! But enough about me, what's Arianna got to say about you?
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. And you don't have to worry, there is zero risk: deposit insurance is just as good at small banks - and unlike the big banks they don't provide the toxic dividend of derivatives trading in a heads-they-win, tails-we-lose fashion.

Got that? Don't be a-skeert! If you've been reading PIC during 2009, you may remember I skipped community banks, passed Go and went directly to the credit union:
The National Credit Union Administration (NCUA) is the federal agency that charters and supervises federal credit unions. They also insure savings in federal and most state-chartered credit unions across the country through the National Credit Union Share Insurance Fund (NCUSIF), a federal fund backed by the full faith and credit of the United States government.

Sort of makes you want to get all common-bondy with someone, eh? Thing is you might already be. I didn't know this, but here in New Jersey, there are literally hundreds of credit unions. The unnamed university has a credit union for faculty and staff, but not everyone knows there's another for students and alumni, and if you're an immediate family member of faculty or staff, you can join too. The one I belong to used to serve as the rusty vault into which I stuffed money. It was hard to get to and with limited hours, even small, regular deposits added up - mostly for Miss Sasha's tuition, but I've stopped having nightmares about writing those checks and the credit union's services are online now. Anyway, credit unions have branched out into home and car loans, CDs and other thingies. The credit union gave me a loan for my braces. Straight teeth, yay! I paid it back in record time and improved my credit rating, also yay! Bonus: a credit union can also connect its members to better insurance policies.

The big banks, generally, are too big. Many are insolvent and many more are unstable. There's no incentive for them to do anything but exploit their customers to the bitter end. You may not have to suck on that. What if you could move your finances to an institution that wasn't trying to fuck you over?

I moved almost everything to the credit union but I still have a checking account for reasons that may no longer be valid. It may be possible to establish electronic billpay, but it is not yet possible to buy savings bonds through the credit union. If I can find a way around that mulberry bush, my checking account will be history; so I am not asking you to consider making a leap while I cling to the ledge. No. I'm pretty sure there's a soft spot where we can all land.

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