Break Up With Your Big Bank

On February 11, 2010, in The Public, Uncategorized, by Donny Shaw

It’s almost Valentine’s Day — a perfect time for you to take a moment and reflect …and then go out and end that abusive relationship with the big banks. You can put your foot down once and for all and tell the big banks that you’re not going to go along with their lying, cheating, gambling ways. You have the dignity to bank with someone who’s not going to continually screw you over. We’re here to help.

If you’re still banking with one of the Big 4 Banks — Bank of America, Chase, Citigroup, Wells Fargo — you should take this moment, as we enter the season of love, to think seriously about severing that relationship and banking with a local bank or credit union instead. Their fees are fairer, their interest rates are lower, and, instead of gambling your money away, they lend to small businesses in your community and help to create jobs.

You can start by simply moving some of your money in the big bank into a new account at a smaller bank. And don’t forget to close that big-bank credit card account. We have a page of tips to make it super easy to do both. It really isn’t that hard, and it’s super rewarding.

And after you break up with your big bank, join us at 400 events across the country to pass out flyers and help others end their relationships with the big banks.

Ninety percent of all credit cards are from the four big banks, Bank of America, Chase, Citi and Wells Fargo. Americans are collectively drowning in $700 billion in credit card debt because of the absurd interest rates that are being charged. The big banks are using their market dominance to charge interest rates that are, on average, 20 percent higher than the rates of local bank and credit union cards. And the big banks’ overdraft fees for debit transactions are just as abusive.

The financial industry has gotten so big that their profits now make up more than 40% of all U.S. profits. People need to fight back so that there is more money available for industries that create jobs. Otherwise income equality and unemployment will continue to rise. At A New Way Forward, we’ve been fighting for almost a year now to have these big banks to be broken up by Congress. Instead Congress has let them grow even bigger than they were when they were determined to be too big to fail, and nothing is being done to rein in their worst abusive behaviors. If Congress won’t break them up, we, the people, will break up with them.

Start by breaking up with your big bank for Valentine’s Day. And then go out and get your loved ones something nice with the money you’re going to save from banking with a local bank.

This Valentine’s Day, It’s Time to Break Up With Your Big Bank>>

P.S. Help your friend and family end their abusive banking relationships by sending our message to them over email, Facebook, or Twitter. They’ll be glad you did.

What Too-big-to-fail Means for Compensation

On February 1, 2010, in Background and Research, by Tiffiniy Cheng

These are great visuals from WSJ, and Econompic Data did a fantastic job boiling down for us:

from WSJ: “executives, traders and money managers at 38 top financial firms can expect to earn nearly 18% more than they did last year, and slightly more than they did in the record year of 2007.”

from ED: “the lack of competition among the largest banks has caused compensation within the industry to become even more concentrated.”

“the increase in compensation (and risk) is now concentrated among only these top banks. Bonuses at these “big four” banks are up a whopping 25% since 2007 (all other firms are down 18% since that time) and 40% since 2006 (whereas all other firms are down 2%).”

“For all the talk and supposed intervention, nothing has changed (actually, with these banks even more “too big too fail”, things may actually be worse).”

Big banks haven’t even signed up

On January 19, 2010, in Background and Research, by Tiffiniy Cheng

Bloomberg reports that the biggest banks haven’t signed onto the program to modify mortgages like they said they would and like they need to do in order to make up for their predatory loans.

Numbers are showing that “Bank of America, Wells Fargo, JPMorgan Chase & Co. and Citigroup Inc. carry such mortgages at about $150 billion more than their value”.

The U.S. Treasury Department has failed to win agreements to get struggling borrowers’ home- equity debt reworked, among the biggest roadblocks to reducing foreclosures that may reach a record 3 million this year.

None of the lenders holding a combined $1.05 trillion of the debt has signed contracts requiring participation in the second-mortgage modification plan announced eight months ago. The largest banks remain “committed” to joining, Meg Reilly, a department spokeswoman, said in an e-mail.

President Barack Obama in February announced a $75 billion program to cut first-mortgage payments. The Treasury detailed a plan on April 28 in which second-mortgage owners modify or retire debt when the first lien is changed, saying it would be running in a month. The near-record level of home-equity debt held by lenders including Bank of America Corp. and Wells Fargo & Co. may lead to foreclosures that threaten housing stability after the worst slump since the 1930s.