Occupy Wall Street demonstrators carry dollar signs past the New York Stock Exchange, April 25, 2012. (Reuters/Andrew Burton)
One day early in the summer of 2012, two men in crisp business attire were talking about plastic debit cards at the Manhattan office of a financial services company. The men were interested in negotiating a deal to launch a debit card line. They assured the company that they would have a cooperative bank to go along with the cards eventually.
The two men were not, however, financial industry insiders trying to make a buck. Despite their suits and their surroundings, they were outsiders: activists who were part of one of Occupy Wall Street’s alternative banking groups.
A strand of Occupy is setting up a financial services cooperative. Last month, the Occupy Money Cooperative incorporated and launched its website. It will take its first step in the real world by issuing a prepaid bank card shortly that will most likely cost ninety-nine cents, or less, to purchase and serve as a kind of alt-checking account for activists, Occupy supports and, perhaps most important, people excluded from the mainstream banking system. Right now, it’s a small operation—there’s the board and then a group of eight members, all working part-time.
While these financial services bear the name Occupy, its backers are far from the shaggy activists that were once the Fox News stereotype. Occupy, in this case, consists of bankers and even a diplomat. In fact, some are so “inside” the system they are rebelling against that they have insisted to journalists that they remain anonymous lest they lose their jobs. And that is why they have been able to use the technical language of financial services insiders while leveraging outsider identities, values, ideas and goals. Christian Brammer, a 52-year-old financial consultant on the founding board of the group, worked for Deutsche Bank Group for almost sixteen years, for instance.
“It was a pretty nice career,” said Brammer, of his years at Deutsche (he now works as a financial consultant). His reasons for joining the Occupy Money Cooperative were clear, though. “The industry has changed a lot. Bankers forgot that their economic role in society is a utilitarian one. Payment systems shouldn’t cost huge amounts for people.”
In addition to the bank card, the cooperative aspires someday to offer a full range of banking services, including checking accounts, low-cost peer-to-peer loans and financial education. To get to this level of operations will be a difficult task, however. It will require the group to acquire a bank or a credit union, as Carne Ross, one of the cooperative’s members, explained. So the cooperative’s more immediate ambition is to raise several hundred thousand dollars in donations and, with those funds, pay the co-op’s initial operating expenses, working capital and small staff. For now, it will be a digital entity rather than a four-walled operation.
The group started meeting soon after the Occupy movement emerged in September 2011, with its first meeting in October. The members of the cooperative wondered: What if they could flip the banking relationship so that clients (in their diction “users”) owned the bank, rather than the other way around? The fall of 2011 was a dark time for the millions of Americans struggling financially, as well as a moment of dawning consciousness about the realities of today’s banking system, which can seem rigged. After all, banks make big bets and ordinary citizens bail them out; clients play by the rules and then banks stick them with a seemingly endless array of hidden fees, many of which fall heaviest on the poorest Americans. As The New York Times reported recently, even mistakes as small as a bounced check or a tiny overdraft “have effectively blacklisted more than a million low-income Americans from the mainstream financial system” due to obscure private databases that are used by major banks.
As a result, millions of Americans are actively excluded from today’s banking system—a problem in a working democracy where citizens should be able to spend or access their own funds cheaply, safely and easily. In 2011, one in twelve American households was “unbanked”—that is, they did not have a bank account, according to a Federal Deposit Insurance Corporation survey. Twenty percent of households were “underbanked,” meaning that while they had a bank account, they also relied on pawnshops, payday loans and other means of off-label banking.
Banking “is a toxic system” said Occupy Money Cooperative member Ross, who usually serves as the co-op’s unofficial press flack. By day, Ross runs Independent Diplomat, which provides diplomatic advisory services to nonstates or people living in threatened territories, such as the Sahrawis, the stateless people of the Western Sahara. Before that, however, he made headlines as a British diplomat who resigned after giving then-secret evidence to a British inquiry investigating the bogus intelligence claims that brought us the Iraq War. And now he is turning his attention to the banking industry, because, he said, “You don’t have to do a lot of research to see banking is a racket and the state is insuring private banking industry.”
For Ross and the other co-op members, bank cards represent one of the system’s more obvious, and perhaps fixable, rip-offs. Today, plastic is fast replacing cash as the medium of basic exchange. Yet most debit cards require a checking account (in return for which they are usually fee-free). And while pre-paid bank cards have few barriers to purchase (no credit checks, no wait), they are also relatively unregulated and tend to nickel-and-dime their users, many of whom are poorer to begin with (those living from paycheck to paycheck, the unbanked and the underbanked).
Take the now-defunct Kardashian Kard, a cutesy (kutesy?) yet predatory nightmare bearing the figures of three of the raven-haired reality-sisters on its shiny surface. It cost $9.95 upon purchase and then twelve monthly fees of $7.95 for a minimum of one year, which meant that just getting to use the card for a year cost more than $100. Kardashian Kard users were also charged $1 every time they added money to their card and $1.50 to speak with a live operator. Suze Orman’s prepaid debit card is less expensive but still costs a $3 activation fee and a $3 monthly maintenance fee.
In contrast, the Occupy card would require only a modest ninety-nine-cent fee and no monthly fee at all. That would make it more accessible to Americans who were otherwise being exploited by fee-laden cards.
To the members of the Occupy Money Cooperative, high fees for cards are just another symptom of a larger disease. As one member of the co-op put it, they are motivated by the belief that today’s banks are “unredeemable.” The cooperative model exists elsewhere in banking, of course: the main example is credit unions, which are owned collectively by those who hold accounts and which charge small fees or none at all. And the hope is that the Occupy Cooperative will resemble credit unions in that every member will use the co-op’s services and some may even work as employees of the co-op.
For now, the cooperative’s challenge has become a more typical one in the face of the American media’s apathy toward both the banking industry and inequality itself: How can they generate awareness? The plan is to use Occupy’s vast and varied networks and “tap into the sympathizers,” Ross told me. Ross notes that this plan is a departure from “a more conventional press campaign, the kind that conventional people like me would think of.”
Indeed, the co-op encapsulates both the challenges and the value of bringing innovative and sometimes radical ideas to the mainstream. In my new book Republic of Outsiders, everyone in its pages is confronted with this same dilemma. How can they stay true to their original and sometimes edgy ideas while at the same time finding a mass audience or market?
Ross and others at the cooperative see this dilemma clearly. Part of what makes the Occupy Cooperative and planned debit card unusual is that it’s not just for activists but is intended as something to be purchased by people who are being left out of traditional institutions against their will. As the site’s promotional material suggests, “The card isn’t only for Occupy supporters.” According to the site, we can all “benefit from using the Card because it is a better and cheaper product.”
Two years after Occupy exploded, its ensuing projects have run the gamut from uncommon success (think Occupy Our Homes, Occupy Sandy) to noble obsolescence. And while we don’t always know the alchemy that creates something effective and durable, Ross and the Cooperative are hoping their Occupy debit card will do just that.
As Ross says, albeit yearningly, “It could be a mainstream product.”
Carne Ross on Occupy’s dream for alternative financial institutions.