Take Your Money Out of the Hands of the Banking Oligarchs
By Arianna Huffington and Rob Johnson, Move Your Money !
Posted on December 30, 2009, Printed on December 31, 2009
Last week, over a pre-Christmas dinner, the two of us, along with
political strategist Alexis McGill, filmmaker/author Eugene Jarecki, and
Nick Penniman of the HuffPost Investigative Fund, began talking about
the huge, growing chasm between the fortunes of Wall Street banks and
Main Street banks, and started discussing what concrete steps
individuals could take to help create a better financial system. Before
long, the conversation turned practical, and with some help from friends
in the world of bank analysis, a video and website were produced devoted
to a simple idea: Move Your Money.
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
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
Everyone around the table quickly got excited (granted we are an
excitable group), and began tossing out suggestions for how to get this
Eugene, the filmmaker among us, remarked that the contrast between the
big banks and the community banks we were talking about was very much
like the story in the classic Frank Capra film It's a Wonderful Life,
where community banker George Bailey helps the people of Bedford Falls
escape the grip of the rapacious and predatory banker Mr. Potter.
It was a lightbulb moment. And, unlike the vast majority of dinner
conversations, the excitement over this idea didn't end with dessert. It
actually led to something -- thanks in great part to Eugene and his
remarkable team, who got to work and, in record time, created a
brilliant, powerful, and inspiring video playing off the It's a
Wonderful Life concept. (Go to Huffington's website and see it.)
Within a few days, the rest of the pieces fell into place, including an
agreement with top financial analysts Chris Whalen and Dennis Santiago,
who gave us access to their IRA (Institutional Risk Analytics) database.
Using this tool, everyone will be able to plug in their zip code and
quickly get a list of the small, solvent Main Street banks operating in
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.
Think of the message it will send to Wall Street -- and to the White
House. That we have had enough of the high-flying, no-limits-casino
banking culture that continues to dominate Wall Street and Capitol Hill.
That we won't wait on Washington to act, because we know that Washington
has, in fact, been a part of the problem from the start. We simply can't
count on Congress to fix things. We have to do it ourselves -- and the
big banks are the core of the problem. We need to return to the stable,
reliable, people-oriented approach of America's community banks. ...
Find a Bank
Not all community banks are risk free. Some of them got involved in the
same risky behavior that took down some of the biggest banks. Thanks to
the volunteer services of a group called Institutional Risk Analytics
(IRA), you can get a listing of the most sound community banks near you.
IRA lists only banks that, according to its rating system, which is
based on government data, get a grade of “B” or better.
Credit Unions: Many folks have written us suggesting that people should
examine credit unions. Like the FDIC for banks and thrifts, the National
Credit Union Administration insures the deposits of credit unions and is
a good resource for financial data on specific institutions. Credit
unions do not disclose financial data in the same way as FDIC-insured
banks. As a result, credit unions are not presently included in the IRA
ratings database, which covers over 8,000 federally insured banks and
thrifts. IRA is developing a method to rate credit unions in a way that
is comparable to the IRA bank stress ratings. We'll be updating
users of "Move Your Money" on this issue early in 2010.
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