Are you angry about Wall Street's reckless excesses? Are you disappointed with President Obama's limp approach to reform? You can change this, acting individually and collectively. Withdraw your deposit and savings accounts from the large banks that brought the system to ruin and were subsequently rescued with billions in government bailouts. Put your money instead in smaller, safer banks or credit unions closer to home--the thousands of community institutions that do not harvest their profits from greed and recklessness.
"Move Your Money" is an electrifying slogan that's lighting up the Internet because it shows people how they can push back against the big dogs of banking. The concept is simple, but this is a big idea that could alter the timid direction of financial reform.
This campaign is potentially more than a feel-good gesture. If coordinated with institutional reform efforts, it could lead to a broad rebellion against the financial system, with citizens reclaiming the power to act directly when politicians are too intimidated by moneyed interests to act in the public interest. Economist Jane D'Arista put it crisply: "We are not a nation of widows and orphans. We have quite a lot of money, and people control some of it. They might ask why they don't control more of it."
The campaign was launched just before New Year's Eve by Arianna Huffington of the Huffington Post and Rob Johnson of the Roosevelt Institute. An influential bank-rating firm, Institutional Risk Analytics, donated a website window (moveyourmoney.info/find-a-bank), where citizens can find banks in their ZIP code that IRA certifies as safe and sound.
In the first forty-eight hours more than 100,000 responded with inquiries. Within a week, people had searched for good banks in 16,631 ZIP codes--nearly 40 percent of the nation. The search tool is now getting 45,000 users a day. Naturally, the corporate media promptly assured readers that "ordinary Americans lack the power to hurt the big banks," as a Washington Post headline put it.
Wrong. The cynics either do not understand banking or misunderstand the widespread public anger. Dennis Santiago, IRA's CEO and managing director, explained that banks compete fiercely for the "core deposits" provided by individual and small business accounts--this stable money is their preferred base for profitable lending. Take away core deposits, and bankers feel immediate balance-sheet stress. Expand the account base for community banks, and they gain greater stability and greater lending power. "Will moving your money have an effect?" Santiago asked. "And by effect, I don't mean making a momentary political statement. I mean making a structural difference to the country's financial system. The answer is yes."
Structural change ought to be the primary goal of financial reform--breaking up the concentrated power held by mega-banks and creating a balanced system of smaller, more diverse lending institutions that thrive by serving local credit needs. Alas, the Obama administration and Congress are pursuing the opposite goal--rescuing the behemoths that failed and encouraging even greater financial concentration. This will lead to more reckless adventures, more "too big to fail" bailouts.
"Move Your Money" is an important model for teaching people how to change a dysfunctional system. The same principle of taking control of your own money is at work in related reform movements. A campaign launched by faith-based community organizations associated with the Industrial Areas Foundation identifies sky-high interest rates on credit cards and other lending as the ancient sin of usury. IAF groups are asking churches, foundations and local governments to withdraw funds from the usurious banks that profit by destroying borrowers. Organized labor, likewise, has launched an aggressive movement to insist on responsible investing values for the pension-fund wealth of working people, urging state treasurers and fund managers to invest for society's interests as well as good returns.
Changing the nature of finance capitalism is a long road, to be sure, and the industry will resist change every step of the way. But the fight begins in earnest when people decide to move their money.