Occupy Checking Account

The best way to get revenge on greedy mega-banks might just be as a customer

| November 10, 2011
Protesters chant outside Chase in Eureka on Saturday. - PHOTO BY CARRIE PEYTON DAHLBERG
  • photo by Carrie Peyton Dahlberg
  • Protesters chant outside Chase in Eureka on Saturday.

At first blush, last Saturday's Bank Transfer Day seemed like a great idea -- a beautifully simple way for consumers to take revenge (finally!) on our nation's sinister and impersonal mega-banks, the financial behemoths whose predatory lending and sleight-of-hand derivatives effectively turned our economy into the largest pyramid scheme ever devised. And when it crumbled, we bailed them out with our tax dollars.

Bank Transfer Day, the brainchild of a Los Angeles art dealer, imagined an army of righteous bank customers coming together to holler in unison: "I'm taking my business elsewhere!" The idea was to close your accounts with big banks and transfer the money to a local credit union or community bank.

Lots of folks have done so. Since Sept. 29, when Bank of America announced its now-aborted plan to charge a $5 monthly debit card fee, some 650,000 people have joined credit unions, depositing more than $4.5 billion into new savings accounts, according to a press release from the Credit Union National Association. And the numbers have no doubt grown since the release was issued last Thursday, three days before Bank Transfer Day proper.

Local Chase branches braced for disgruntled customers and rowdy protesters, hiring extra security guards. A teller commented to one Arcata customer that they'd lock down the building if necessary. But the mobs failed to materialize.

Saturday around noon, security guard Lee Lawson stood inside the glass door on the back side of the Jacoby Storehouse, sipping coffee and looking out through the rain at people using the ATM. "It's quiet," he said. And it had been all morning.

At Wells Fargo in Arcata, customers filed in and out peacefully. Meghann Thomas, an HSU sophomore from Palm Springs, said she had no intention of closing her account. She doesn't want to pay big ATM fees when she leaves town. "I live so far away from where I go to college, I need one of those national banks," she said.

Over in Eureka at the Bank of America on Fourth Street, Caterina Lewis-Perry of Eureka was doing some banking at the ATM. "I'm a huge local activist," she said. She and and her partner donate food from their garden to the food bank, and they always take reusable shopping bags to the store. But she's not switching banks, either, because she worries about ATM fees when she travels. As a fisheries technician, she travels a lot for work. And half her family lives in Jamaica. "I want to support Umpqua," she said. "I want to support Redwood Capital. But I feel like they can't support me."

Up the street at Chase, a small but steady flow of customers moved through the teller line while, outside, a dozen or more sign-wielding protesters chanted, "Move your money! Move your money!" The security guard locked the door, allowing customers in one at a time. There was a brief discussion among employees about whether or not the police had been called. But soon the protesters moved on.

On a local level, Bank Transfer Day appeared to be a bust, which, curiously, might be for the best if you're looking to stick it to mega-banks. Over the past week, a number of analysts have concluded that moving your money out of big banks would likely have the opposite of the intended effect: It could save the banks money.

Here's why: If your checking account balance is less than $25,000, your bank probably isn't making any money from you. According to Bill Israel, a finance consultant quoted in The New Republic, the average checking account costs banks around $200 a year to maintain, what with all the servicing, statements and teller salaries involved. Banks used to make that money back (and then some) through overdraft fees and debit card swipe charges. But recent government regulations staunched those revenue streams.

"The fact is ... big banks won't shed many tears if those customers go off to a credit union," Felix Salmon of Reuters wrote last week.

So if you didn't get around to closing your account with Bank of America, Chase or Wells Fargo, don't sweat it. You might be better off bleeding the beast from the inside.

Carrie Peyton Dahlberg contributed to this report.

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Comments (18)

Showing 1-18 of 18

This account appears to have bought the banks' party line, hook, line and sinker. Bank executives do not keep people's accounts unless they are profitable or expected to become profitable in the future. If those 650,000 accounts that transferred from banks to credit unions had not been of use to the banks, they would not have been solicited and kept by the banks. No sector wants to lose a million customers. The banks just have. Their PR firms will explain why that's no problem. You'll notice that B of A didn't follow through on its new fee. That directly contradicts the PR line. Just as Americans worked for divestment from South Africa years ago, patriotic Americans must continue to divest from the banksters who are destroying our country. And we should be prepared for well-crafted lies in response.

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Posted by Mitch on 11/10/2011 at 8:38 AM

"You might be better off bleeding the beast from the inside." What a crock. It's the other way around, with the fees they charge. We switched from one regional bank in the Southeast to a credit union -- I got tired of paying them $5 a month to hold my mad money account in savings because it was under $1000, $10 for each checking account because there was less than $500 in it. They've 'temporarily' decided against charging the $5 monthly debit card fee -- but you know that as sure as the sun comes up in the east, they'll revisit it once the furor dies down.

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Posted by Kathy on 11/10/2011 at 11:22 AM

Nice try at reverse psychology.

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Posted by Hannah on 11/11/2011 at 5:09 AM

Logic NCJ, logic. If A, then B, not necessarily C. I am an example against your conclusion. I have had an account with B of A for over twenty-five years. I moved to the Credit Union last week. And I am not that much of an "active" activist. I wasn't happy about moving because of certain inconveniences but then if we all keep acting only in our self-interest the entire problem will never get any better. Do we want to sacrifice our education and jobs and stay at the mercy of Wall Street and Bankers or do we want to sacrifice online banking options? Time to send a real message about consumer political power. It is a no-brainer in my view.
Also consider, most people I've met in the middle-age group, already have their accounts in the Credit Union. Doing the local thing has been big here for a long time. Not as many accounts to move. But I am sure Bank of America appreciates this article.

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Posted by Jane on 11/11/2011 at 10:42 AM

Doug Henwood's introductory note on his November 5th program (see link below) supports the gist of this article, and expands upon the theme. It would be nice to have some easy solutions, but money is "fungible, protean, and highly mobile." Switching banks is not a good solution. http://www.leftbusinessobserver.com/Radio.html

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Posted by Joel Mielke on 11/11/2011 at 12:49 PM

@Jane: I LOVE logic! It's my favorite. Here's the logical argument presented in this story: If servicing small bank accounts -- specifically those that generate little or no revenue through overdraft fees or the like -- costs banks money ... and if you have such an account ... then it will cost your bank money. That first "if" is a hypothesis, which is why I used the words "could" and "might" to qualify my conclusion. Maybe the economists I quoted are mistaken. But the framework of the argument is indeed logical, no? Also, as a fellow fan of logic, you might want to shy away from the term "no-brainer."

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Posted by ryan on 11/11/2011 at 5:26 PM

Because banks are trying so hard to get my business I think I will bleed the beast from the outside. Chase is offering $125.00 to people who open an account with $100 deposit. Start your Citibank relationship & Get Up to $400 in Gift Cards. Bank of America- You can receive a $50 bonus for opening a checking account at Bank of America with direct deposit. Visit the bank promo page for more info on this bank bonus. Expires 1/20/12. These big banks sure are trying hard to loose money on checking accounts that they barely need

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Posted by Goldie on 11/11/2011 at 8:07 PM

We all get those offers. Banks profit from people who live on a shoestring and sometimes need to borrow. They miss deadlines and pay penalties.

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Posted by Buzz on 11/11/2011 at 8:42 PM

Bryan, I can see points in your supposition but it does not take into account the real fact that financial institutions have been making large profits from micro fees and usury fees on those lower end checking accounts. One of the driving factors for kick-back (sorry I know those hyphens must drive you mad) from the bank is that the Obama Administrations regulations, which didn't need Congress to sign on, undid a lot of the usury fees. But not all of them. In short banks make money on everything even those users they are regulated to service. If they can't make money on it directly then can sell their customer information to other semi-legitimate companies and marketing firms who will. The banks figured out quite a while ago how to use economy of scale, Ebay style, to suck the blood of those with the least blood to suck (a charming phrase don't you think?).

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Posted by Jane on 11/12/2011 at 7:29 AM

That should be Ryan in lieu of Bryan. My apologies. Maybe I can find a bank offering a vision healthcare plan for my not-so-needed checking account. You think?

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Posted by Jane on 11/12/2011 at 7:32 AM

Good points, Jane. You certainly won't see me nominating mega-banks for humanitarian awards. I think the "bleed from the inside" argument only applies to the relatively small percentage of customers who can avoid the usury fees you mention.

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Posted by ryan on 11/12/2011 at 9:38 AM

Jane's metaphor reminds us that the poor have always been the most ripped-off class. Banks are complaining that new federal regulations (that Republican candidates are constantly harping about) are preventing them from profiting, but I'd bet that a late payment on a credit card debt still results in a forfeiture of the agreed upon 6% interest rate so that the bank can impose a usurious rate of interest (18% or higher). Am I wrong?

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Posted by Joel Mielke on 11/12/2011 at 9:55 AM

The last thing greedy power of any sort wants to see is for people to think that their actions matter.
If they get bailouts because they are too big to fail how about we help make them small? . Santa Cruz county just won a lawsuit against BofA and Chase for rigging bids and fraud and is severing ties with them. http://www.mercurynews.com/central-coast/ci_19310560

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Posted by Goldie on 11/12/2011 at 11:04 AM

We're never going to "make them small" by moving our accounts to smaller banks, but people who face foreclosure might consider taking a pound of flesh by demanding paper trails from their mortgage holders. The destructive games that Goldman Sachs and their associates played with bundled mortgages now make it difficult for banks to provide evidence of ownership, histories of legal process, etc. Their only prayer is that foreclosures are not challenged.

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Posted by Joel Mielke on 11/12/2011 at 11:28 AM

I decided to close my Chase account and open a credit union account, which I should have had from day one. I think what this article and our nation are failing to recognize is it's not only about bringing down the big corporate giants, but about supporting your local community. I think one way corporations are succeeding is by seeming so powerful and unstoppable, it's causing people to feel helpless and give up. We are so blessed to be in a community that has practically every needed resource on a local level. We need to stop putting money into large outside businesses and start focusing on building our community.

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Posted by Naiyana Scott on 11/13/2011 at 5:23 PM

Bleed 'em from the inside. Bleed 'em from the outside. Who cares as long as you bleed them. I've been with a credit union for years, and would never go back to a big bank.

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Posted by Doug Brunell on 11/14/2011 at 9:23 PM

I've been with CCUSH for years and I can tell you that the ATM issue is false. As a credit union member, you can use other credit union ATM machines. I can use Coast Central's or RCU's just as easily as little old Garberville's CCUSH. There's no excuse to stay with the big banks.

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Posted by Chris C. on 11/17/2011 at 11:15 AM

Summation of the article: I guess we should just give up cause doing stuff is like, hard.... man. My life is so hard, I can't possibily handle the prospect of taking thoughtful actions in my life. :(

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Posted by sadface on 11/19/2011 at 8:50 AM
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