Sojourners Magazine: April 2012
The recession that ushered in the suffering of the past few years was caused by numerous factors. But front and center on the list were the activities of a few mega-banks and Wall Street firms, in particular their highly speculative financial transactions and soon-to-be-toxic “products”—such as credit default swaps and other complex derivatives—made possible in the wake of the radical deregulation of the industry in the past two decades.
The practices of these huge multifaceted corporations bore little resemblance to the passbook-savings banks of days gone by.
But, as author Stacy Mitchell explains in our cover feature, it doesn’t have to be this way. Banks can actually, once again, be an asset to their communities. The Bailey Building and Loan Association—supporting families and small businesses in It’s a Wonderful Life—may have been a work of fiction, but credit unions and other community-based financial institutions that do this are very real. In the past 15 months, more than half a million people, as well as city and county governments and various organizations, have moved their accounts from the mammoth conglomerate banks to small local banks and credit unions. (San Jose, California, for instance, moved $1 billion out of the Bank of America.)
As Mitchell notes, moving your money is only one step in moving banks back to accountability. Along with personal actions, it will take changes in public policy, and some very different behavior, before banks truly serve “the rest of us.”