The biggest banks have an ethical obligation to help alleviate the pain from a crisis they helped create. After being extended such "grace" because of the fear of an economic meltdown, the banks then failed to extend that grace to anybody else, creating a modern "parable of the unmerciful bankers." Knowing no shame, they then decided to use that public money to make themselves even richer, and then pass out billions of dollars in bonuses to their top executives -- while middle-class families were left to fend for themselves. Job loss, unsustainable mortgage payments, and exorbitant bank fees are just a few of the problems facing the middle class. I would suggest four steps that the big banks should take.
First, begin lending again. The big banks have drastically cut lending to small businesses, one of the primary job creators in the U.S. The banks received billions in financial assistance, but instead of helping small businesses, they've used the financial assistance mostly to increase their own wealth. That's just wrong and not in the spirit of how the bailouts were intended.
Second, the banks need to begin to modify mortgages for families facing foreclosure at a much faster rate. Currently, the loan modifications have been taking place at a painfully slow pace, leaving millions of American families in financial distress.
Third, the banks need to curtail their exorbitant overdraft fees. These fees primarily hit the middle class and working poor who are struggling to make their accounts balance. I was on a radio show a few weeks ago when an unemployed man called in to say he'd miscalculated his bank balance by $15. But because of that slight overage, his bank charged him $60 in fees! Again, that is just wrong. Banks received $38 billion in overdraft fees last year -- over half from debit cards.
Finally, and this may be the biggest issue, big banks should actually support common sense financial regulation for the common good, including a robust and independent consumer financial protection agency to make sure that the risky and abusive financial practices that helped precipitate this crisis do not happen again. That would be in the best interest of the country, but also in the best long term interest of good financial institutions. But up until now, the big banks have spent hundreds of millions lobbying against reform.
But truthfully, I am not very optimistic about the big banks' willingness to change -- unless we make some different choices about our own money. That's why my wife Joy and I decided to "fire" Bank of America. We took our little bank account from our branch of Bank of America, and moved it to a local bank that's been more responsible. In fact, there's now a whole movement of people who are taking their money out of the big banks and putting it into smaller community banks. The big banks say they are too big to fail; so let's make them smaller. I've been talking to families who are doing that, churches who are considering it, and even to large denominations who are seriously examining where their money should be. If enough people began to make that choice, especially in the faith community, such actions would soon become more than symbolic, and perhaps finally get the attention of Wall Street.
When I talk to pastors about these issues, they now tell me that the abusive "usury" policies of the nation's largest banks have now become, for them, a family issue because of what is happening to so many of their parishioners; a moral issue because of the fundamental unfairness and injustice of it all; a theological issue because of biblical injunctions against just this kind of behavior; and because of all the above, this is becoming a faith issue for many of us.
Jim Wallis is the author of Rediscovering Values: On Wall Street, Main Street, and Your Street -- A Moral Compass for the New Economy, CEO of Sojourners and blogs at www.godspolitics.com.