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 […]
An Unfinished Mission: On Tuesday, November 12, 2013, a group of financial experts gathered in the Russell Senate Office Building in Washington, DC to discuss the current state of financial industry regulatory reform, with a keynote speech by Senator Elizabeth Warren (D-MA). Speakers exhibited a sense of self-awareness that has been largely missing from the conversation on financial rulemaking; panelists […]
A: They receive a nice letter politely asking that they “use maximum discretion and effort” to meet their obligations. Shame on Wells Fargo, Bank of America, Citibank, and JP Morgan Chase, who are reported to be sitting on $130 million worth of insurance payments due to victims of Superstorm Sandy. Imagine if the banks’ customers could respond to the mega-banks with the same late fees and compound interest that mega-banks demand of their customers who are late with payments far smaller than $130 million! It’s just one more reason to Break Up With Your Mega-Bank. From CNN: “Families need to be able to return to their homes and the state economy, which took a hit from Superstorm Sandy, needs the boost from spending on repairs,” Cuomo said in a written statement. “After insurance companies have sent homeowners checks to pay for repairs, the money should not be sitting with the bank because of red tape.” The state’s Department of Financial Services found that four of the biggest U.S. banks — Wells Fargo, Bank of America, Citibank and JP Morgan Chase — are holding more than 4,100 checks worth more $130 million. The banks were not immediately available for comment, though have maintained that they were socked with a massive amount in payouts that require processing in the wake of the storm.