Banks Got Nowhere to Run To, Baby

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We’re proud to collaborate with The Nation in sharing insightful journalism related to income inequality in America. The following is an excerpt from Nation contributor Greg Kaufmann’s “This Week in Poverty” column.


US Bank branch in Omaha, Neb.
U.S. Bank branch in Omaha, Neb. (AP Photo/Nati Harnik, File)

Last year, U.S. Bank held its annual shareholders meeting in Minneapolis, Minnesota, home of its corporate headquarters. The event was dominated by shareholders and proxies who are members of Minnesotans for a Fair Economy, an alliance of community, faith and labor organizations working for a more equitable economy.

“Our members asked CEO Richard Davis direct questions about issues like principal reductions and foreclosures, and payday lending,” said Eric Fought, communications director of the organization. “We were really effective in holding them accountable, so this year they looked for another solution — to hide from us.”

On Tuesday, April 16, U.S. Bank officers will jet from their hometown to hold this year’s meeting in Boise, Idaho. If the bankers are hoping for a better reception in this reddest of states, or that activists will take a pass on the long distance travel required to get there, then Martha and the Vandellas have a word of advice: Got nowhere to run to, baby. Nowhere to hide.

More than 100 members of the Idaho Community Action Network (ICAN) — who are mostly rural, working poor and seniors — will travel to take direct, non-violent action both inside and outside of the meeting. More than half of these individuals will be driving 3 to 7 hours to reach the venue. Their allies from Minnesotans for a Fair Economy will be there to greet them, along with workers from SEIU Local 503 — the largest union in Oregon with 54,000 members.

“People are so excited that Minneapolis and Oregon are coming to support this effort,” said ICAN executive director Terri Sterling. “It helps our membership, it helps motivate them.”

Among the issues on the agenda: a call for U.S. Bank to pay its fair share in taxes; write-down mortgages to help stem the foreclosure and underwater mortgage crisis; and end payday loans with exorbitant interest rates. These issues are of concern, of course, not only to the activists from these three states, but also to people across the country.

“Almost anywhere the banks go in the country — they will find out as they try to hide away at their meetings — there will be a set of groups agreeing that the role of banks in the economy and politics of the country is damaging,” said labor organizer Stephen Lerner, who created the Justice for Janitors campaign and is now working on Wall Street accountability campaigns.

Sterling says that even in a state like Idaho she hasn’t “found one person — red, blue, or tea party — that likes big banks.”

Idaho has the highest share of minimum wage workers in the country, and for every job opening that pays a living wage for a family of three, there are 32 job seekers. According to LeeAnn Hall, executive director of the Alliance for a Just Society, a national coalition of eight state-based community organizations (including ICAN), 4,400 families lost their homes to foreclosure in 2012. Today, 22 percent of all mortgage holders in the state are “underwater,” owning more on their mortgages than their homes are worth. In Canyon County, where approximately 12 percent of Idaho’s population resides, 66 percent of homeowners are underwater — one of the highest rates in the nation.

“Our members are doing multiple jobs to make ends meet, and often times not making ends meet,” said Hall. “As a result they are losing their homes, or using payday loans to stretch and meet their family obligations — to their detriment.”

U.S. Bank calls its payday loan product a “checking account advance,” and it has an annual percentage rate (APR) of up to 365 percent. It also helps finance some of the largest payday loan companies in the country, including Advance America, Cash America and EZ Corp. These “easy money” businesses cluster around low-income communities and communities of color.

Sterling spoke about ICAN member Miranda Davis who was disabled at 19 but as a single mother of two kids still “works to make ends meet.” When her car broke down, she used her utility money to repair it so she could commute to work — and then she took out a $300 payday loan to cover her utility bill. She was only able to pay back the $75 per month interest, and eventually needed another $300 loan.

“She’s now paying nearly $200 per month in interest alone,” said Sterling. “She can work as hard as she can and she won’t ever make enough money to pay off those loans.”

ICAN and Minnesotans for a Fair Economy have been pushing for a 36 percent cap in their states — the same one mandated by the federal government for members of the military and their families. Arizona, Montana and Oregon have also adopted a 36 percent cap on all payday loans.

“If they’re gonna set up a bank in my community, then by golly they should provide me with a short-term, fair lending product that’s less than 36 percent,” said Sterling.

While payday loans and overdraft fees are trapping low-income people in cycles of debt, foreclosures are draining wealth from entire communities.

Activists will speak at the US Bank shareholders meeting about their own experiences with unnecessary, unfair and too often illegal foreclosures. Fought said that last year there was a “success” when homeowner Monique White approached CEO Davis after the shareholders meeting, told him her story, and was then able to get a modification to remain in her home.

But with more than 141,000 foreclosures in the state since 2008, 100,000 homeowners still underwater, lost home value of over $20 billion, and a cost to local governments of $1.5 billion to maintain vacant, bank-owned properties — Fought says these individual successes are hardly enough.

“We want broad solutions,” said Fought. “We know principal reductions to fair market value can solve this. We want to continue to dialogue with US Bank, but it’s been two years now — it’s time to make the solutions a reality.”

Hall said that reducing mortgages to fair market value would save Idaho families over $290 million annually in mortgage payments — money that would be spent in the community and create jobs.

“US Bank is draining resources out of families’ pockets and Idaho’s economy as a whole,” said Hall.

SEIU Local 503 is currently at the bargaining table trying to bring some of those lost resources back to Oregon. Democratic Governor John Kitzhaber is pressing for cuts in the pension fund to make up for resources that vanished in the economic meltdown. But the union estimates that Wall Street lost as much as $300 million through fraud and unethical behavior, and that they should be targeted for investigation and repayment, rather than retirees paying for Wall Street’s misdeeds. The state has $150 million to $180 million in pending lawsuits against some of these firms but the union says “that’s just the tip of the iceberg.”

Fought said that it is critical that U.S. Bank pay its fair share of revenues in Minnesota as well — that a decade of “cuts only” budgets under former Governor Tim Pawlenty (current CEO of the Financial Services Roundtable) was “devastating for people.” He noted, for example, that the state has been forced to borrow money from school funding to pay for other bills. Meanwhile, US Bank actively lobbies for tax breaks and loopholes through the Minnesota Business Partnership.

“We need to ensure that we have adequate funding for education, health care and other human services, and because U.S. Bank is based here, they have a unique responsibility,” said Fought. “The fact is if we want to be effective in our work for a better economy we have to look at the larger problem here — these banks are really destroying communities.”

The action in Boise is part of a broader and diverse movement that is renewing the focus on big banks and irresponsible corporate neighbors that prevent a more equitable economy. A week later, activists will be in Salt Lake City, where Wells Fargo will do its best to hide after holding its shareholder meeting last year in San Francisco. Bank of America and JPMorgan shareholder meetings are just around the corner, too. You can get involved here.

“There is a wonderful alignment developing between unions, community groups and groups focused on Wall Street accountability,” said Lerner. “Instead of having many separate fights on issues — on how to fund local government and public services, how to keep people in their homes, how to address money in politics — people are seeing that they are all connected because it’s the same giant banks at the center of so many crises.”


Greg Kaufmann is a Nation contributor covering poverty in America. His work has also appeared on Common DreamsAlternet, Tikkun.org, NPR.org, CBSNews.com and MichaelMoore.com. He serves as an adviser for the Economic Hardship Reporting Project.
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  • http://www.facebook.com/ginger.rankin.3 Ginger Rankin

    Funny that people still think Idaho IS the wilderness! Well, we do have beautiful wilderness areas but we also have smart and gracious and great people! You go ICAN!
    Ginger, Moscow

  • Anonymous

    I find it interesting that the Evangelical right will get all up in arms over the two issues of abortion and gay rights, but will do absolutely nothing about usury. The bible is very very clear about the ethics of charging high interests and ESPECIALLY to the poor. It is such a standard that it is one of the issues that brings the people of God into judgement for not complying. Really glad to see people of faith, involved. But I would lay odds they are not the “kind” of faithful acceptable to mainstream Evangelical voters.

  • Anonymous

    Thank you for all that you have done and continue to do. It’s a great thing to make CEOs squirm when confronted with their greedy behavior. We need to also think with our own bank accounts and place those assets in credit unions or banks that haven’t yet acted so self-servingly. Unfortunately, money is the only thing that talks with these shameful people.

  • Anonymous

    Thank you, Idaho! Famous potatoes and people who won’t be pushed without pushing back! Not a bad combination.

  • mike_canada

    The Canadian big bank oligopoly was under fire last week too, for bringing in temporary foreign workers from India to help outsource Canadian banking jobs. And yet the banks are making enormous profits, and charging ever-higher fees.

  • Anonymous

    No kidding. What ever happened to usury laws?

  • http://www.facebook.com/harry.leslie2 Harry Leslie

    On the heals of our Canadian banks outsourcing jobs to foreigners right here in canada this is excellent news.

  • http://theposologist.blogspot.com/ Jeff Healitt

    It goes without saying that the big banks have too much power and couldn’t care less about people when it affects the bottom line.

    But, these corporations wouldn’t have that power without politicians writing legislation and creating loopholes and corporate welfare that supports their efforts. They wouldn’t be generating enormous profits if people would quit doing business with them.

    The bankers don’t care about activists protests. You can’t shame them into changing their ways. They know how their actions are affecting average Americans, but they’re not going to change their ways until they are held accountable legally.

    So, it seems to me that activists’ efforts would be better used trying to convince the American public not to enable these big banks to continue to marginalize them.. as common sense as that sounds.

    Don’t bank with them, don’t borrow from them, and don’t do business with them in any way what-so-ever. Protest and shine light on any political and judicial efforts to enable these corporations by your elected or appointed officials.

  • Wm. Sweeney

    US Bank received well-deserved questioning at last year’s annual meeting, and questions regarding its pay-day loan activity are entirely appropriate for a company that touts itself as a good corporate citizen. But the premise of this article is wrong.

    US Bank moves its annual meeting among major cities within its geographical market – which includes the state of Idaho. So the story line about ‘hiding’ from protesters is pure conjecture on Mr. Kaufmann’s part — unless of course he has some inside information which validates this premise (and I doubt that he does).

    Massaging a story to obtain a good headline or lead is an art that has been perfected by FOX news…there is no need to emulate that practice to achieve ‘fair and balanced’ reporting.

  • Banks Patsy

    It took me almost 4 months to get my IRA CD tranfered from Wells Fargo. The day after I finally received my funds(no added interest by the way)-their quarterly report can out with record profits. How many other people did they use to get there? To big to fail? How can you fail when you can lie, cheat and steal with no penalty?