The movement against Corporatocracy has taken hold and found its footing. And while the media struggle to parse a bumper sticker message from the Occupy Wall Street movement, the occupiers continue to grow in numbers, awakening America’s dormant revolutionary spirit. Bank Transfer Day is one of the first tangible manifestations of the Occupy phenomenon whereby Americans are encouraged to move their money from large public banking institutions to community banks and, more specifically, member-owned credit unions.
Don’t be misled by Chicken Little pundits on Fox News. This is not a run on the banks and it will neither cripple the economy nor coerce Congress into enacting prudent regulatory reform. But it will send a small and important message to the American financial oligarchy that people are paying attention and ready to take action against institutional greed and corruption.
If you are one of the tens of thousands of Americans who are planning on participating in this holiday, there are a few practical rules of engagement to heed. The first is to put away your Guy Fawkes mask when removing your hard-earned money from a bank. While Nov. 5 is indeed Guy Fawkes Day in England and his likeness is symbolic of Anonymous, the group largely credited with the more surreptitious planning behind Occupy Wall Street, wearing a mask into a bank and demanding money— even when it’s your own—is still a pretty terrible idea.
Moreover, it is important to understand the overall health of the institution you’re considering moving your money into. Although it is unlikely most of us will move sums that exceed federal deposit insurance guarantees, risk is a consideration in any financial transaction. Because federal law requires every bank and credit union to maintain minimum capitalization and liquidity standards, a significant growth in deposits in a short period of time without income producing instruments such as home mortgages and auto loans to offset deposits can overwhelm a small institution. In fact, some smaller banks and credit unions may be unable to increase their deposit base, forcing them to turn potential customers away.
It is wise, therefore, to treat Nov. 5 as the beginning of a process, not an event. Consolidating debt and improving your personal credit rating are important first steps that should be taken to solidify your personal foundation. At this point, you will be able to more easily move deposits as well as loan obligations on your personal assets to a community bank or a credit union. A great banking relationship is one that works both ways.
One of the primary reasons small, stable banks are having a difficult time in this recession is the onerous burdens placed upon them due to the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act in early 2010. Despite the honorable intent implied in the name of the bill, Dodd-Frank did more to handcuff our economy than help consumers. In fact, the regulatory burden placed on community banks and credit unions is so disproportionate that it favors larger financial institutions that are sitting on (literally) trillions of dollars instead of pumping them back through the economy via the consumer. These banks and investment banks have the personnel and financial wherewithal to handle the mountains of paperwork required to eventually turn consumers and business owners down for loans. What we’re left with is a sadly ironic low-rate lending environment that no one can participate in. The Obama administration has taken the stance that any reform is positive despite the fact that this exact scenario played out for more than a decade in Japan with similar results. The combination of Congress’ Dodd-Frank Act and the Federal Reserve’s Quantitative Easing policy has essentially brought the banking sector to a grinding halt for the majority of Americans. There is no such thing as a “character loan” anymore. Fall one month behind on your mortgage payment or fail to pay your credit card bill on time and you are out of luck. And as for the giant Wall Street firms that got us into this mess and continue their reckless behavior to this day—it’s business as usual.
The Occupy Wall Street protestors are keeping a tally of the number of protestors arrested for exercising their constitutional right to peaceably assemble versus the number of Wall Street bankers busted. It’s more than 1,000 to 1. The one is former hedge fund manager Raj Rajaratnam (Left). This number may double, however, as prosecutors have set their sights on another man named Rajat Gupta (Right), former partner at McKinsey and Company. After everything that went down involving the corrupt practices behind the financial collapse in 2008, I find it amazing that only two people have been found worthy of prosecution thus far. I find it less amazing and more ridiculous that both of them happen to be brown.
But take heart, my dear revolutionaries. Progress and change are upon us all. If you believe it is useless to resist the will of mega-corporations and government, witness the decision by several banks, most recently Bank of America, to rein in their proposed new banking fees. This was a victory for the consumer and a testament to the power of protest. This effort was successful for the same reason Bank Transfer Day will signal a real shift of dollars. It is also the reason why Republican presidential nominee Herman Cain’s 9-9-9 plan is being revealed as an anti-poor regressive policy, the Citizen’s United ruling by the U.S. Supreme Court is being ridiculed, and war veterans have joined protests across the nation.
The reason, my friends, is that the jig is up. The 99 percent have woken up and they’re pissed.
It will take time to untie the thousands of knots the 1 percent has tied in the financial system, effectively choking off the money supply from flowing throughout the economy. It will be done one knot at a time. And for those who believe that the Occupy Wall Street movement is simply a plan for the redistribution of wealth in America, it’s not. This is about creating equitable access to wealth and the ability for people everywhere to thrive on a level playing field that properly rewards equal measures of risk, planning, luck and diligence – the fundamentals of entrepreneurship that comprise the so-called “American Dream.” At a minimum this is about creating a system that does not punish those who seek to earn a fair wage for an honest day’s work.