Saturday is Bank Transfer Day

This Saturday, November 5, 2011, is Bank Transfer Day. KTLA news reports that Kristen Christian "was tired of paying outrageous fees to banks for a severe lack of services." So she started the Bank Transfer Day Facebook page encouraging visitors to shift their accounts from banks to credit unions. Kristen sounds like an enthusiastic Occupier, but in fact her Facebook page denies that she was inspired by or organized by Occupy Wall Street. Conversely, Occupy Wall Street wholeheartedly backs Bank Transfer Day. As do I.

I see several reasons to participate in this event.

1. The big banks have spent millions lobbying to gut bank reforms. It's bad policy to have banks with so much money that they can write laws, purchase politicians, and regulate the bank regulators. Here's some of the data collected by OpenSecrets.org.
   
   Moving your money out of these banks gives them less money to work with.
2. The 2009 bank bailout brought many troubled banks back to profitability. But the primary goals of protecting home values, preserving homeownership, and increasing bank lending were not achieved. Foreclosures continue to mount. Lending did not increase but rather continued to decline well into the recovery. Banks had the ability to do something about this, but did as little as possible. When you close your bank account, let them know this is not acceptable.
3. When the credit crisis struck in 2008, federal regulators poured tens of billions of dollars into the nation's leading financial institutions because the banks were so big that officials feared their failure would reverberate throughout the economy causing a disastrous wave of bankrupcies. Unfortunately, the biggest banks are now 20 percent larger than they were before the crisis and control a larger part of our economy than ever. When you move money out of these big banks, you make them smaller!
4. The extravagant bonus system for bank executives probably contributed to the financial crisis by encouraging high risk strategies, with taxpayers paying for losing strategies. Big banks seem especially prone to the "Lake Wobegone" effect, where all of their executives are above average and should be paid accordingly. These bonuses shake my confidence in the ability of large banks to engage in relatively safe investments.

Notice that I did not include the main reason most people are so infuriated with their bank, namely the newly-proposed-and-already-terminated $5/month debit card fee. Even though this seems excessive, I don't think it's a particularly good reason. But I do agree that politicians and regulators have been completely paralyzed when it comes to taking necessary action. Consequently, it's up to you and me to do something about it.

Here's what you can do.

1. Find out if your bank or credit card company was "too big to fail." In other words, did they receive bailout funds. If not, pat yourself on the back and stop here.
2. Open a checking, savings, and/or credit card account with a small community bank or credit union. Look for one at moveyourmoney.org
3. Over the next month, transfer your funds and recurring payments to this new account.
4. Once the new account is up and all your payments have cleared your old account, close that account and tell your bank why.

On Saturday, November 5, Occupy Sarasota is planning a Transfer Your Money March. All marchers welcome at 9:30am at Five Points Park, downtown.

Sources: KTLA news, The Washington Post, Move Your Money Project