Before there was “Move Your Money” there was “Fire Your Bank.”
It was January 2009, and 3000 miles from the epicenter of the financial meltdown, 800 people attended an economic justice town hall in Portland, sponsored by Jobs with Justice, the Oregon Working Families Party (OWFP) and others. People wanted to take action to protect their own local economies from the aftershocks of the disaster wrought by the Big Banks.
Barbara Dudley, co-chair of the OWFP, suggested that folks begin looking at where monies are deposited and invested. A core group focused on banking emerged and came up with the name, “Fire Your Bank.” The group organized several actions, with people serving giant pink slips to Wall Street banks in downtown Portland, closing their accounts, and moving their money to local banks and credit unions. It also began researching the community banks and credit unions, and contacting local bankers to garner support for a longer-term effort to create a state-owned bank that would partner with local banks to make loans to Oregon businesses, farms, students and homeowners.
The 2009 campaign not only was a precursor to the Move Your Money campaign, but it also involved many key organizers now taking part in the local Occupy protests throughout the state.
Fast forward to the first Saturday of November—“Bank Transfer Day”: 40,000 new customers nationwide deposited $90 million with credit unions, adding to the 650,000 people and $4.5 billion in deposits that had been moved to community banks in the preceding weeks. In Oregon, a savvy and diverse coalition that had already been working for nearly three years to create a state bank realized it isn’t enough to simply move money.
“We were telling people move your money but weren’t being clear about where to,” explains Dudley. “Some of the credit unions or local banks are just as bad as the big banks—I mean, there is a difference amongst them.”
So a coalition of six organizations that includes OWFP, Jobs with Justice and the Rural Organizing Project created Oregon Banks Local to help people determine just “how local a bank or credit union truly is.”
Oregon Banks Local—with assistance from the New Rules Project—researched and rated real, objective and measurable data, including: whether an institution’s headquarters is in the state, region or elsewhere; whether ownership is cooperative, private or limited stock, or NASDAQ/NYSE traded; percentage of branches in-state, the region or elsewhere; and the percentage of assets in small business loans.
The other key strategy of Oregon Banks Local was to connect with the Occupy Portland movement for Bank Transfer Day.
“They had energy and we had a plan,” says organizer Jared Gardner, who has been instrumental in both the state bank campaign and Oregon Banks Local.
The plan was to march to a highly rated local credit union and “connect the dots,” as Gardner puts it, between the Occupy, Move Your Money and state bank movements which are trying to make the local economies more resilient. So Northwest Resource Federal Credit Union stayed open that Saturday and added 30 new accounts. (The bank typically adds 24 new accounts per month and serves more than 6100 members.)
Jim McCarthy, president and CEO of the $92 million bank in Portland, told the Credit Union Times “it was one of the best days” in his fourteen years in banking.
While individuals moving their money to local banks is critical in order to shore up local financial systems, borrow locally and increase demand for local banking, Steve Hughes, state director of OWFP, said at the event that there is a bigger campaign on the horizon.
“I think the biggest chunks [of money] we need to look at are municipal, county and state governments,” said Hughes. “They hold huge deposits and right now they deposit that money into the very same Wall Street banks that ran roughshod over our community.”
Which brings us full circle to the Oregon state bank movement. Currently, the big five Wall Street banks receive 66 percent of Oregon’s total deposits, according to Oregon Banks Local. But they aren’t lending to small businesses and commercial properties in small town main streets and rural areas (just like they aren’t doing in the rest of the country).
The current “virtual state bank" proposal—supported by both the State Treasurer and Governor—would leverage existing state funds (such as economic development funds, a portion of the public employee pension fund, lottery dollars) to issue these kinds of neglected loans in conjunction with community banks and credit unions—institutions that aren’t currently in a position to make the loans themselves.
According to Dudley it looked like there would be a vote on the proposal during the 2011 legislative session when it moved through committee with bipartisan support. But on the last day, with a divided State House of 30 Democrats and 30 Republicans, the Republicans didn’t let it come up for a vote. While the 2012 session will only meet for one month both the Governor and Treasurer are determined to pass the bill.
“I think the Republicans are feeling quite a bit of pressure because they did nothing for jobs or the economy last time around,” says Dudley. “Also, with election season coming up, we’re finding candidates who are running hard on a ‘let’s move public money into local credit unions’ message. This is really becoming popularized on a very significant level.”
Gardner says the coalition is also now collecting reports from partners all around the state regarding where every city and municipality banks, and what the local investment policies are—which policies need to be changed so that jurisdictions can freely move monies to local banks and credit unions. It isn’t always as easy as one might think—there can be local regs about bank size, caps on amounts permitted in banks with less than $10 billion in assets, and diversification requirements, to name a few obstacles.
“That’s really where the strategic next level is for us,” says Gardner, “and it’s already going on, because people have been working at this for so long.”
When it comes to building a truly local and sustainable economy that keeps resources in state, investing in Main Street and rural communities, just follow the Oregon Trail.