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+--- Thread: Move Your Money: A New Year's Resolution (/thread-2850.html)
Move Your Money: A New Year's Resolution - Myra Bronstein - 03-01-2010
This is good. This is really really good.
http://www.huffingtonpost.com/arianna-huffington/move-your-money-a-new-yea_b_406022.html
Watch the video here! And find your community bank:
http://moveyourmoney.info/
From Huffington Post:
"Too-big-to-fail banks are profiting from bailout dollars and government guarantees, and growing bigger. Tell us which community bank you use, and why.
Last week, over a pre-Christmas dinner, the two of us, along with political strategist Alexis McGill, filmmaker/author Eugene Jarecki, and Nick Penniman of the HuffPost Investigative Fund, began talking about the huge, growing chasm between the fortunes of Wall Street banks and Main Street banks, and started discussing what concrete steps individuals could take to help create a better financial system. Before long, the conversation turned practical, and with some help from friends in the world of bank analysis, a video and website were produced devoted to a simple idea: Move Your Money.
The big banks on Wall Street, propped up by taxpayer money and government guarantees, have had a record year, making record profits while returning to the highly leveraged activities that brought our economy to the brink of disaster. In a slap in the face to taxpayers, they have also cut back on the money they are lending, even though the need to get credit flowing again was one of the main points used in selling the public the bank bailout. But since April, the Big Four banks -- JP Morgan/Chase, Citibank, Bank of America, and Wells Fargo -- all of which took billions in taxpayer money, have cut lending to businesses by $100 billion.
Meanwhile, America's Main Street community banks -- the vast majority of which avoided the banquet of greed and corruption that created the toxic economic swamp we are still fighting to get ourselves out of -- are struggling. Many of them have closed down (or been taken over by the FDIC) over the last 12 months. The government policy of protecting the Too Big and Politically Connected to Fail is badly hurting the small banks, which are having a much harder time competing in the financial marketplace. As a result, a system which was already dangerously concentrated at the top has only become more so.
We talked about the outrage of big, bailed-out banks turning around and spending millions of dollars on lobbying to gut or kill financial reform -- including "too big to fail" legislation and regulation of the derivatives that played such a huge part in the meltdown. And as we contrasted that with the efforts of local banks to show that you can both be profitable and have a positive impact on the community, an idea took hold: why don't we take our money out of these big banks and put them into community banks? And what, we asked ourselves, would happen if lots of people around America decided to do the same thing? Our money has been used to make the system worse -- what if we used it to make the system better?
Everyone around the table quickly got excited (granted we are an excitable group), and began tossing out suggestions for how to get this idea circulating.
Eugene, the filmmaker among us, remarked that the contrast between the big banks and the community banks we were talking about was very much like the story in the classic Frank Capra film It's a Wonderful Life, where community banker George Bailey helps the people of Bedford Falls escape the grip of the rapacious and predatory banker Mr. Potter.
It was a lightbulb moment. And, unlike the vast majority of dinner conversations, the excitement over this idea didn't end with dessert. It actually led to something -- thanks in great part to Eugene and his remarkable team, who got to work and, in record time, created a brilliant, powerful, and inspiring video playing off the It's a Wonderful Life concept. Watch it below.
Within a few days, the rest of the pieces fell into place, including an agreement with top financial analysts Chris Whalen and Dennis Santiago, who gave us access to their IRA (Institutional Risk Analytics) database. Using this tool, everyone will be able to plug in their zip code and quickly get a list of the small, solvent Main Street banks operating in their community.
The idea is simple: If enough people who have money in one of the big four banks move it into smaller, more local, more traditional community banks, then collectively we, the people, will have taken a big step toward re-rigging the financial system so it becomes again the productive, stable engine for growth it's meant to be. It's neither Left nor Right -- it's populism at its best. Consider it a withdrawal tax on the big banks for the negative service they provide by consistently ignoring the public interest. It's time for Americans to move their money out of these reckless behemoths. And you don't have to worry, there is zero risk: deposit insurance is just as good at small banks -- and unlike the big banks they don't provide the toxic dividend of derivatives trading in a heads-they-win, tails-we-lose fashion.
Think of the message it will send to Wall Street -- and to the White House. That we have had enough of the high-flying, no-limits-casino banking culture that continues to dominate Wall Street and Capitol Hill. That we won't wait on Washington to act, because we know that Washington has, in fact, been a part of the problem from the start. We simply can't count on Congress to fix things. We have to do it ourselves -- and the big banks are the core of the problem. We need to return to the stable, reliable, people-oriented approach of America's community banks.
So watch Eugene's amazing video, then go to www.moveyourmoney.info to learn more about how easy it is to move your money. And pass the idea on to your friends (help make this video -- and this idea -- go viral!).
JP Morgan/Chase, Citi, Wells Fargo, and Bank of America may be "too big to fail" -- but they are not too big to feel the impact of hundreds of thousands of people taking action to change a broken financial and political system. Let them gamble with their own money, not yours. Let's turn big banks into smaller banks. We'll all be better off -- and safer -- as a result.
Make it your New Year's resolution to move your money. We can't think of a better way to start 2010."
Move Your Money: A New Year's Resolution - Myra Bronstein - 12-01-2010
http://www.denverpost.com/business/ci_14127222?source=pophome
al lewis | dow jones newswires
Lewis: What used to be a crime is now just banking
By Al Lewis
Dow Jones Newswires
Posted: 01/06/2010 01:00:00 AM MST
Updated: 01/06/2010 01:44:14 AM MST
Terry Smiljanich was an Assistant U.S. Attorney in Tampa, Fla., in the 1970s, prosecuting loan sharks.
"Just like in the movies, guys would come down from New York to collect," he recalls.
A deadbeat borrower in one of Smiljanich's cases even survived the cinematic cliche:
"They went into a bar and grabbed him, took him for a little ride, and told him that if he didn't find a way to pay them off within 24 hours they were going to break his legs."
High-interest loans with terrifying consequences is such a lucrative business that America's banking industry lobbied for years to make them legal.
"Bank of America doesn't break your legs, but they will ruin your credit and they will hound you to death," Smiljanich said.
Banks from Citigroup and Wells Fargo on down have raised interest rates on some of their credit card customers to as high as 36 percent. At that rate, an unpaid balance nearly doubles in two years.
"These are rates that the mob was afraid to charge," Smiljanich complains.
Banks are suffering losses from mounting credit defaults. And they are racing ahead of new credit laws that take effect next month, restricting the fees they can charge and the ways they can jack up rates.
Taxpayer bailouts, and the ability to borrow nearly free money from the Federal Reserve, apparently weren't enough to pay for their mistakes. So banks are sticking it to their most debt-dependent customers.
It used to be called usury.
At 62, Smiljanich is the semi-retired partner of Tampa law firm, James Hoyer Newcomer & Smiljanich, and the managing editor of a website called the Consumer Warning Network. In a recent video post, he offers a summation of how we as a society virtually abandoned the word, "usury."
Proscriptions against unjust lending go back to ancient times when even some of history's biggest despots feared the rich would take advantage of the poor.
In the 16th century, Henry VIII departed from Vatican law, capping lending rates at 10 percent. This became common law in the United States. And for much of U.S. history, those charging more could be prosecuted.
In the late 1970s, Congress relaxed usury laws so that banks could keep pace with runaway inflation. When inflation died, the laws remained relaxed at 18 percent to 21 percent. In 1999, usury laws were loosened further when Congress passed and President Clinton signed the Gramm-Leach-Bliley Act.
(Remember when former Sen. Phil Gramm called us a nation of economic whiners?)
This act allowed banks to charge whatever their state of operation permitted. So South Dakota — already permissive of usurious rates — did away with usury laws altogether as an economic development strategy. That's why when you look at your credit card statement, you're likely to see a South Dakota address.
"The banks just love South Dakota," Smiljanich said. "From there, banks can charge you any interest rate they want. But if you or I charged interest rates that high, we'd be in jail."
Which brings us to the 79.9 percent card from First Premier Bank. Which is based, where? Sioux Falls, S.D.
First Premier bills itself as the nation's 10th-largest issuer of Visas and MasterCards. Clearly, its 79.9 percent special is a subprime offer for those whose credit history is so bad their only alternative is the neighborhood loan shark.
A representative of the bank sent me a two-page statement explaining its rationale for what appears to be the highest rate of any credit card in history.
Essentially, First Premier claims it is trying to help out the hapless victims of our economy, but I'll let the bank say it in its own words:
"Our approach is much like high-risk auto insurance. If you have a bad driving record, you have to pay more and once your driving record has improved, your premiums will come down
"People are looking for solutions Personal bankruptcy filings are soaring, and more and more people are finding themselves affected by a negative credit history
"Good credit takes years to build but it can be damaged very quickly. Divorce, medical situations and job loss are some of the main causes We need to price our product based on the risk associated with this market
"Because of the new regulations that limit the fees on a credit card to 25 percent of a credit card's line, we will need to shift the premium from upfront fees on risk to the interest rate
"We are conducting a variety of limited tests to gauge interest in various products. Some of these limited tests include offers of 79.9 percent and 59.9 percent. The 79.9 percent card has an upfront fee of $75. Individuals can avoid any interest charges on purchases by paying off their balances each month
"We will be in full compliance with the new regulations Feb. 22, 2010."
Don Lucchesi, a character in the 1990 film, "The Godfather Part III," said, "Finance is a gun. Politics is knowing when to pull the trigger."
Smiljanich put it this way: "Banks have better lobbyists than the mob."
Al Lewis: 212-416-2617 or al.lewis@dowjones.com; blog: tellittoal.com
Read more: http://www.denverpost.com/business/ci_14127222?source=pophome#ixzz0cMLSjVJ0
Move Your Money: A New Year's Resolution - Peter Lemkin - 12-01-2010
Great, in theory, but what if one has no money to move....:hmmmm: