Mega-banks: More than just Banks

One of Green America’s goals is to teach consumers how the businesses you choose to support can have a big impact on the world around you. From the food we buy each week, to the clothes we wear, to the energy we use to heat and power our homes – on almost all levels of the economy, we have a choice between companies that operate with an awareness of the effects of their presence on the world, and companies that pursue the goal of growth over anything else. And while it is easy to see the negative impacts of massive agricultural engineering companies, clothing companies’ sweatshops in faraway countries, and dirty international oil companies, the financial services industry influences nearly every sector of the economy – often with serious implications for people and the planet. And as banks actually sell very few tangible products, it is more difficult to recognize that our choices can drastically affect our environment and our communities. To give an example, let us look at commodities: the raw materials for nearly every product you can buy. Recent news coverage of the banking industry has revealed that large investment institutions like JP Morgan Chase and Goldman Sachs have been spending their money on warehouses. As in the large empty buildings where industrial materials, like aluminum and copper are kept before manufacturers buy them to produce goods. Why would a bank be interested in owning a warehouse? There are […]

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“Dad, What’s a Financial Crisis?”

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“It’s something that happens every five to seven years,” Jamie Dimon told his daughter without a breath of sarcasm, writes Bloomberg financial reporter Bob Ivry in his book “The Seven Sins of Wall Street.” As the United States navigates its way through a post-recession financial environment, our tendency to fall back on old habits makes the term “recovery” questionable at […]

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When in Doubt: Commit Forgery?

This week, Linda Tirelli, a lawyer representing a client in a foreclosure case with Wells Fargo came across a very disturbing piece of evidence: a company manual instructing the bank’s staff in how to forge documents to proceed with foreclosures.  The manual instructs employees how to process [mortgage] notes without endorsements and obtaining endorsements and allonges.  In essence, if employees lacked the documents needed for foreclosure, they were instructed to make them up.  As Tirelli stated to the Washington Post: “This is a blueprint for fraud,” said Tirelli, who attached a copy of the manual as evidence in the lawsuit filed in U.S. District Court in White Plains, N.Y. “The idea that this bank is instructing people how to produce these documents is appalling.” The disclosure of the manual has been duly reported in the business sections of major media, but has not made a huge splash.  It’s shocking that the media and the public are this numb to the latest revelations of fraudulent behavior by megabanks.  Two years ago, several banks paid a settlement of $25 billion for their fraudulent conduct in robo-signing mortgages (although much of that money never actually benefited the people who lost their homes).  Apparently, the money paid by Wells Fargo for its portion of the settlement was not enough to deter ongoing wrongdoing.  The bank is so emboldened by the failure of the US government to truly crackdown on bank fraud that it was […]

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Why a Central Banking System Doesn’t Work for Everyone

Green America’s Take Charge Program urges consumers to support smaller, local financial institutions in lieu of megabanks. Here are a few reasons why local banks and credit unions benefit smaller communities across the country.  Since the early 20th Century, The United States has relied heavily on its centralized banking system. Represented by the Federal Reserve and top-tier financial institutions, (such as Citi and Bank of America), a centralized system is one in which a single entity regulates a state’s currency, money supply, and interest rates. The Federal Reserve has many responsibilities, including regulating and supervising private banks, protecting the credit rights of consumers, and issuing the nation’s currency. The role of large, wealthy private banks is important in understanding how the central banking system works. The Fed is not controlled by the government, but rather by a group of governing board members who are often employees of private megabanks. Private banks give the board information related to their particular economic situation, and Federal Reserve policy is based on their suggestions. In turn, Federal Reserve policy largely influences to whom, and by how much banks should lend their money. The centralization of banking benefits wealth concentration and increases risks Research suggests that “high-ability entrepreneurs” tend to gravitate towards a central banking system. Essentially, wealthy individuals and institutions enjoy the connectedness that a centralized system offers. Pooling together the resources of powerful entrepreneurs, however, increases the risk of losing all of that […]

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Bank of America Announces a New Plan for Taking Money from Those Who Can Least Afford It

Recently, Bank of America announced a new debit card where card holders will be charged $4.95 per month for overdraft protection.  The pitch to cardholders is that if they overdraw their accounts they will not rack up sizable overdraft fees.  On the surface, this might sound like a good deal to people who keep a low balance in their account and worry about accidentally triggering overdraft fees. But, the reality is quite different.  That’s because bank customers can’t overdraft their accounts unless they opt in for overdraft protection.  Gone are the days when banks could opt you in (without your knowledge) for overdraft protection  and then charge you hefty fees ($35 per overdraft)  for going pennies below your balance when you use your debit card. Allowing unaware customers to overdraft their account and then forcing them to pay $35 for this “privilege” mobilized consumers and their advocates to press for reform.  Thanks to banking reform legislation passed in 2010 (which Green America and its members supported), bank customers have to opt-in for overdraft protection.  If they don’t opt-in for the protection, and they attempt to overdraft their account, their card is simply rejected and no fee is charged.  Unfortunately, many consumers don’t understand this.  A 2011 survey of consumers who opted in for overdraft protection found that 66% of them mistakenly signed up for the service because they thought that if their debit card was rejected for trying to make […]

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This Valentine’s Day: Ditch a Megabank Zero and Take Up With a Hero

Valentine’s Day is a time to celebrate the ones we love.  But what if your love is one-sided and you are on the losing end?  If you are giving your hard-earned dollars to a megabank – such as Citi, Bank of America, Chase, Wells Fargo – you might want to look at ending your relationship soon.  Ask yourself these questions: Do you want to be in a relationship where your partner abuses the planet?  If not, you should be aware that Citi, Bank of America, and Chase are all major funders of coal mining and coal-fired power plants. Do you want to be in a relationship where your partner rips you off?  If not, you should know that all the major banks and credit card issuers have been sued by federal and/or state authorities for abusive mortgage, credit cards, or other products.  And, big banks keep looking for ways to pile on fees. Do you want to be with a partner that has a total disregard for others and takes no responsibility for its actions?  Chase, Wells Fargo, Citi, and Bank of America were all involved in fomenting the mortgage crisis that crashed the economy in 2008. They gambled with our money and then made us bail them out. It can be hard to leave a long-term relationship.  You get used to a bank and think that it will be a big hassle to change, or you’ll lose out on […]

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Credit Cards 101: Responsible Credit Cards for Young Green Americans

According to a recent poll, 34% of Americans aged 18 to 50 do not have a credit card. For most young people, the word “finance” conjures up little more than images of suits on Wall St and a dangerously low checking account balance. Fears of crippling debt (often the result of massive student loans), predatory mega-banks, and identity theft deter us from applying for a credit card. Paying for all of your expenses with cash is a responsible option, and it is entirely possible to live a life without credit. There are, however, many advantages to educating yourself about credit cards and using them wisely. They’re small, convenient, and easy to monitor, and they allow us to accomplish a range of activities that we couldn’t with just cash or a debit card. Here are a few examples: –          Housing – Before you sign a lease on a house or apartment, your landlord will want to check your credit as a gauge of how good you are at paying your bills. If you have bad credit or no credit, a landlord will be very wary of renting their property to you. Utilities companies also use credit as a gauge of financial responsibility. Even if you can convince a landlord to rent you their property, convincing the electric utility to turn on your power without good credit could be a real challenge. –          Employment – Employers may check candidates’ credit to judge […]

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Take Charge of your Card – Switch to a Credit Card that Supports People & the Planet

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Today, Green America is proud to announce our newest campaign:  The “Take Charge of your Card” campaign urges consumers to move their money away from mega-banks with questionable environmental practices, restrictive fees and interest rates, and outlandish executive compensation and into smaller community development banks and credit unions. One of the best ways to remove support from banks that fail […]

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Newsflash: Regulating Banks is Good for Credit Card Customers

When Congress decided to reign in the abuses of the credit card industry four years ago through the Credit Card Accountability Responsibility and Disclosure Act (the Card Act), a lot of industry observers declared that increased regulation would lead to high costs for consumers overall.  Not so.  As reported in the New York Times, a recent study by Neal Mahoney, an economist at the University of Chicago found that federal regulation of credit card abuses has been unequivocally beneficial to consumers, to the tune of $20 billion per year. Before the Card Act, megabanks would regularly charge excessive fees and interest rates to cardholders, particularly low-income cardholders.  For example, banks would regularly jack up the interest rate on credit card holders for no reason – the cardholders were not delinquent in their payments – often to rates exceeding 25%.  Banks also played with the due dates for payments to engineer more late fees, and charged customers extra for paying by phone or over the internet.  These interest rates and fees boosted profits at megabanks, and acted as an enormous transfer of wealth from mostly working class and poor Americans to our wealthiest financial institutions, helping to drive record salaries for CEO and upper management. When the Card Act passed in 2009, the industry warned that consumers would be penalized overall with less access to credit and higher rates in general.  Overall, that has not happened.  While banks have pulled back […]

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Join The Forward on Climate Rally Feb. 17, 2013

At noon on Sunday, February 17, thousands of Americans will head to Washington, D.C. to make Forward on Climate the largest climate rally in history. Green America is proud to be a sponsor of this action, a project of 350.org, Sierra Club, and the Hip Hop caucus. We urge all Green Americans who can make the trip to join us at this historic event — come make your voice heard! In his eloquent inaugural address, President Obama stated: “We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations. We cannot cede to other nations the [clean energy] technology that will power new jobs and new industries, we must claim its promise.” Now is the time for President Obama to address the climate crisis by rejecting, once and for all, the Keystone XL dirty tar sands pipeline. According to the National Oceanic and Atmospheric Administration (NOAA), 2012 was the hottest year on record in the continental United States. We should be far further ahead than we are in developing renewable energy technologies, so it is imperative that we now accelerate our shift to renewable energy. We also need to emphasize energy efficiency programs that can make a tremendous difference. Come to Washington, DC on Feb. 17 if you can! All the details are at www.forwardonclimate.org Stop by the Green America office before the rally at 10:30am to get […]

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