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.
Last year, US 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, US 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 three to seven 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 US 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.”
US 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 Gov. 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 US Bank pay its fair share of revenues in Minnesota as well — that a decade of “cuts only” budgets under former Gov. 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 US 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 Dreams, Alternet, Tikkun.org, NPR.org, CBSNews.com and MichaelMoore.com. He serves as an adviser for the Economic Hardship Reporting Project.|