Cities need to move their money

Posted by admin | Posted in Politics | Posted on 16-11-2011-05-2008

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Jefferson Smith

Portland mayoral candidate and Oregon State Rep. Jefferson Smith is pushing for Portland to divest its money from too-big-to-fail banks

We may be having success moving hundreds of thousands of accounts away from the too-big-to-fail banks into community banks and credit unions, but there is even BIGGER money being held by municipalities across the country.

San Jose led the way in sticking it to the big banks last year:

On Monday, October 25, San José Vice Mayor Judy Chirco, City Councilmembers Sam Liccardo, Madison Nguyen, Rose Herrera and Kansen Chu San José and leaders with PACT, a grassroots community organization, announced that the City has diverted nearly $1 billion from Bank of America based on the bank’s poor record of modifying loans to stop preventable foreclosures.

In response to PACT’s call for City officials to address the crisis caused by big banks foreclosing on families, the City took action in December 2009.  The City Council voted unanimously to make bank’s records of modifying loans to stop preventable foreclosures a criterion in the City’s investment policy.

As a result, the City has moved almost a billion dollars from Bank of America this year.  In the last quarter of 2009, the City had over $1.3 billion in B of A compared to $417 million in the 3rd quarter of 2010.  The City of San José now holds just 20% of its investments in B of A.  Bank of America is no longer the largest bank in Silicon Valley.

You won’t see banks trying to shrug off losing these kinds of accounts. It’s time to make Move Your Money a political issue, particularly in mayoral and city council elections.

Like in Portland.

Two weeks after Portland mayoral candidate state and Rep. Jefferson Smith publicly challenged Portland to move some of its money to local credit unions, Mayor Sam Adams this morning said he would pursue the cause.

The mayor’s comments came during the public testimony portion of Wednesday’s regular Portland City Council meeting and follow on the heels of the Occupy Wall Street movement and related protests against national banks.

When Portland follows through, it will cost Wells Fargo tens of millions of dollars.

Smith, who is a rockstar in the making (seriously, remember his name) is running for mayor of Portland. He certainly does himself favors by embracing Move Your Money.

Meanwhile, much of the same is going on in Seattle.

Following the lead of the populist Occupy movement, the Seattle City Council will consider a resolution that calls for the city to bank only with “responsible financial institutions” and scrutinize businesses that have gotten city tax breaks.

Proposed by Councilmember Nick Licata, the resolution is also a recognition of the weeks-long Occupy Seattle protest as a “peaceful and lawful exercise of First Amendment Rights.”

“It says we recognize Occupy Seattle, we recognize their message that the country is really hurting, because of practices of many of the large banks,” Licata said Monday. “They want an ally. We should be an ally with them.”

The problem in Seattle? State law forces cities to do much of their banking with the too-big-to-fail banks.

Goldberg said state law limits Seattle to $100,000 per deposit in a state-chartered credit union. In contrast, the city made $4.7 million in deposits a day in September. So, the whole credit union thing is pretty unpractical.

Looks like state law needs to be changed.

So you want to do something practical to strike back at the banks? Have you already moved all your money and debt (when possible)? Then here’s the next step—put pressure on your elected officials to move taxpayer dollars out of the too-big-to-fail banks, and into financial institutions that actually invest in our communities.

San Jose led the way. Portland and Seattle are making their play. It’s time to make this a national effort.


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