Move Your Money

Watch a report about the Move Your Money movement on CBS Sunday Morning:

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The Move Your Money campaign is encouraging some local financial institutions to expand their services, and has rewarded those that already have, like the First Community Federal Credit Union in Michigan. The Credit Union Times’ Jim Rubenstein reports:

The president/CEO of a Kalamazoo, Mich. credit union said a decision made in November to get back into card issuance has turned out to be prudent and has been generating media coverage.

“It’s really amazing how many people really wanted to place their business with a credit union and also just as amazing that we’ve been getting very high credit scores,” said Cheryl DeBoer, the head of the $415 million First Community FCU.

First Community, headquartered in Parchment, a Kalamazoo suburb, has been repeatedly featured on network newscasts and in ”Move Your Money” blogs for its no-fee, fixed 8.9% rate Visa cards. First Community had sold its portfolio five years ago, but once DeBoer took over she felt cards, now offered through the Members Group CUSO, should be part of the portfolio as good business.

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People around the world are sick of the way their big banks treat them, and some are looking to the Move Your Money campaign. Columnist Tom Sutcliffe, in UK’s Independent, takes a look:

Time, surely, for me to do something. Market forces are the justification generally advanced for the inflation of salaries in the banking sector, and I’m a bit of the market – even if an admittedly negligible one. That’s no excuse for being negligent though – and in this regard ordinary consumers have been, perhaps out of a sense of individual powerlessness.

I have a vague memory that I voted against the demutualisation of the Halifax Building Society years ago, but I honestly can’t remember … and it’s entirely possible that I tossed the relevant paperwork in the bin in the belief that some corporate shareholder would make the decision for me anyway. Too late to change that foolish decision, unfortunately, but it isn’t too late to change my bank account
– as the American grassroots campaign Move Your Money has been encouraging ordinary consumers to do.

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While we support local community banks just as much as credit unions, we seem to have gotten a few contestants for the Move Your Money theme song. Because it’s not a movement without a theme song.

The Disclosures:

Matt Davis:

These videos are part of the YoungFreeHQ.com Lookin’ Like A Fool With Your Money In A Bank contest. All the entries are great.

The Los Angeles City Council is considering a measure to take all government money out of big banks that routinely foreclose on citizens without mercy or trying to keep them in their homes. BNET’s Alain Sherter reports:

“During these times of the financial meltdown and the federal bailout of big banks, it is more important than ever that we ensure that our money is being invested in institutions that are investing back in our community — not those that taking advantage of our residents and ripping off their clients,” said L.A. council member Richard Alarcón, who is sponsoring the motion, in a statement on Tuesday.

HULIQ’s Lanni Shadduck adds:

Alarcon has drawn support from the Service Employees International Union and many local banks and businesses. He has also suggested that banks be graded using a report card system of sorts. Banks that failed to pass would be shut out from city funds.

And Dennis Santiago, who testified on a city council hearing on the subject, weighs in on what’s at stake:

And how much treasure is that? Start with around $28.9 billion dollars in city operating and related pension funds the City can influence directly. Then there’s the wealth of ordinary people and businesses local leaders can influence by example. When I testified to the Jobs and Business Development Committee on February 23rd I included in my testimony a 17 page table detailing the amounts of deposits in small and large bank branches in every zip code in Los Angeles County. It contains a powerful message that the actions of the City of Los Angeles messages a resident and commuter economic base of nearly $300 billion dollars in bank deposits presently split equally between large and small banking institutions. If such an effort activate an “invest local” movement succeeds, that is a potential public-private economic powerhouse.

New York City mayor Michael Bloomberg has previously pledged to move $25 million of municipal tax dollars into local credit unions, but Los Angeles’ motion would divest all of the city’s funds from predatory banks. Pension funds for city employees would likely also be moved.

Students at American University, in Washington, D.C., want to do something to combat the gross wealth inequality in their city. They are campaigning to move some of the school’s $312 million endowment money and put it in local financial institutions which will lend out to get local businesses and help to revitalize the community. The Responsible Endowments Coalition writes:

Individual students as well as universities and other institutions must start putting money in Community Development Financial Institutions (CDFIs), such as community banks and credit unions, so communities who are underserved by our area’s corporate banks can gain access to credit, loans, and the opportunity to provide for their families. As part of the DC community, American University can positively impact these communities by moving some of the cash from our endowment into CDFIs. AU students are campaigning for the university to transfer 5% of the cash assets from its endowment into CDFIs such as the City First Bank of DC . Totaling $4.3 million dollars, these investments would significantly impact low-income communities of color.

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Do you want to spread the word about the value of moving your money? A New Way Forward has a forum full of upcoming events across the country where people will be going public about the movement — handing out flyers, organizing book clubs, all sorts of things. Click here to see if there’s anything going on near you or to take the initiative and make an event of your own.

Stacy Mitchell, senior researcher at the New Rules Project’s Community Banking Initiative, previously showed us how community banks do disproportionately more small business lending. Now she’s saying that the bigger the bank, the bigger the fees:

As our charts show, the biggest banks still impose much higher costs on their customers than small financial institutions do.

Not only are fees lower, but several studies have found that smaller banks and credit unions pay higher interest on savings accounts. In a study published by the Federal Reserve Bank of Cleveland, researchers Kwangwoo Park and George Pennacchi examined data from 1998 to 2004 and found that rates on one-year CDs were an average of 14 percent higher at small banks (under $1 billion in assets) than at large ones (assets of $10 billion or more) and rates on interest-bearing savings accounts were 49 percent higher.

Why are small banks and credit unions a better deal? One reason is that they really want your deposits. Unlike big banks, which have access to wholesale funding, community banks rely much more on customer deposits to finance their lending and investments.

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Want to put your editing skills to the test and help put a stop to the big banks? Just take the video below, add whatever you want, and the best submissions will be featured here and at breakupthebigbanks.com. Got something to say? Say it! It could be funny, serious, romantic, whatever. Go to town, and make this video a tool to get people to move their money.

To enter, download the video here, apply your brilliant idea to it, and email a link to your submission to breakupthebigbanks@gmail.com by March 1st.

Thanks to singer/songwriter/guitar player Sky Seals and to videographer Tom Phillips and his colleagues as the American Movie Company and Digital Alchemy for their help with this contest.

Now, go move your money and get cracking on your video!

Local news outlets across the country are seeing the effects of the Move Your Money phenomenon. From Vestal, N.Y., the local News 10 Now took a look at how community banks are benefiting from the big banks’ bad policies. Watch it here.