banks

by Jason Denney

Banks are our communal tool for funding societal needs, so where you store your money is the best way you can have some control in the direction of what we fund as a society, and thus our future. Though, as you might imagine, it’s difficult to judge a bank as they’ve got their hands in all sorts of investments both “good” and “bad”. However, with return on investment for shareholders and executives a top priority (and legal responsibility) for the publicly traded mega-banks, there’s more motivation to turn a blind eye to funding controversial projects. A relevant aside, if you want to see if you’ve funded oil pipelines via your bank funding Energy Transfer Partners you can use this tool (odds are it does): https://howtodivest.org/.

Thus, I argue that we would benefit as a society by distributing wealth across more banks than an oligarchical few corporate mega-banks. While it would make funding large capital investments more challenging to coordinate, it would ensure that no one bank can be “too big to fail”, thus we could actually punish banks that counter our values. The concerns I have with corporate mega-banks is that it seems they have started offsetting losses from high risk investing by exploiting their baseline customers. They have dismal interest returns and exploitative fee structures (largely targeting the poor). Overdraft fees are not proportional to the amount of the overdraft, thus they typically end up being 300%+ high interest loans. Wachovia (now Wells Fargo) was caught reordering withdrawals in order to incite more overdraft fees (happened to me personally). Wells Fargo was caught opening fake accounts to meet sales targets. Bank of America at one time charged a fee to close an account (now outlawed in some states). Bank of America exorbitantly charged $.40+ per debit card swipe to merchants when the cost of processing the transaction was $.08. When laws limited their charge to $.21, they in turn charged customers $5 per month if they ever made a debit card purchase. To no surprise, the top banks have the lowest customer satisfaction.

So, to keep things simple, I’m recommending that you pursue using a local cooperative bank or credit union. These banks have a commitment to benefiting their members and not outside investors, which leaves them less vulnerable to schemes for short-term gains. In addition, they typically have higher savings account interest rates and better financing terms.

Tools:

• https://howtodivest.org/ethicalbanks/

Resources:

• https://www.nerdwallet.com/blog/banking/socially-responsible-banks/

• https://www.aspiration.com/summit/aim (bank program to track your ethical spending)

• https://www.greenpeace.org/international/story/17203/these-banks-are-still-funding-dangerous-oil-pipelines-heres-how-you-can-stop-them/

• https://www.greenpeace.org/usa/who-are-the-dirty-dozen-banks/

• https://money.cnn.com/2011/09/29/pf/bank_of_america_debit_fee/index.htm