Make no mistake about it, folks:America’s biggest banks are the bogeyman of the American economy. They engineered the economic collapse for profit, and they passed the bill on to you, the taxpayer. They refuse to lend to underwater consumers. With one hand, they shower their employees – the very same ones whose schemes almost collapsed the economy – with seven figure bonuses while looting public coffers with the other. They actively battle legislation and policy aimed at preventing another crash.

But how did this happen? In 1977, the well-intentioned Community Reinvestment Act went into effect. Designed to prohibit discrimination in lending, Wall Street quickly realized its potential for profit.
Bankers realized that they could now make loans to unemployed crack-addicted felons with no income, package those loans with honest debtors who had less chance of default, and sell these packages to investors. Housing prices were on the rise, and interests rates and the cost of lending were low. As long as they stayed this way, underwater lenders could pay off their mortgage by selling their house. Rating agencies signed off on these subprime loan packages, because they were making money off them too.

“I believe that banking institutions are more dangerous to our liberties than standing armies… the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.” –Thomas Jefferson

Wall Street also offered “credit default swaps,” essentially insurance on anything. They profited by selling junk loans and then profited again by insuring them. The money they made allowed them to make more inadvisable loans. It was genius. They thought they had it all under control. But they didn’t.

If we truly had a free market, all those banks would have failed. Market evolution would have struck them down to make room for new, more competitive, and more careful institutions that wouldn’t make the same mistakes. But when the feeding frenzy came to an end, Wall Street’s agents in public office orchestrated the biggest heist of public funds in history to keep them afloat.

Now, those banks are reporting record profits. They’re expanding. They’re handing out huge bonuses. The banks are buying up huge amounts of the debt the government is incurring cleaning up the bank’s mess, again, playing every angle.

Thomas Jefferson once said, “I believe that banking institutions are more dangerous to our liberties than standing armies…the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.” This is exactly what “too big to fail” entails; Wall Street control of the economy. While they reap record profits, the unemployment rate has breached 10 percent and small businesses are starving for cash while financiers roll in it. Small, local banks – the true dynamos of job growth – didn’t get a bail out. They’ve been allowed to fail in record numbers.
Does this piss you off? Because it should.

The distribution of wealth is stacked against the American public. But as a citizen, there are some things you can do to strike back.

MOVE YOUR MONEY! In a capitalist economy, businesses respond to market signals. If you keep your money in big banks, you send the message to them that you’ll continue to patronize them regardless of their behavior. Your money is used as capital to expand corporate and bank power instead of funding jobs and consumer loans. The concept is gaining nationwide momentum. Two of the biggest banks in the United States, Wells Fargo and U.S. Bankcorp, have a heavy presence in Minneapolis. Wells Fargo has an especially bad history of shady business practices. Check out the Independent Community Bankers of America at www.icba.org to find a community bank to move your money into. One excellent option, convenient to campus, is Franklin National bank, which has a branch located at 200 University Ave W. They offer all the services of bigger banks, including online banking and check cards.

KNOW YOUR RIGHTS! As a consumer, you have many legal protections from unethical banking practices that you may be unaware of. For example, you must explicitly tell your bank that you wish them to allow transactions over your credit limit that could lead to fees. Read up on your consumer rights at www.federalreserve.gov/consumerinfo. If your rights have been violated, the Federal Reserve has a complaint system that can be accessed on their website.

SPEAK UP! Use www.leg.state.mn.us/leg/districtfinder.asp to locate and contact your local, state and federal representatives and let them know you support new regulations for banks that will protect consumers and prevent future shenanigans. Sign the Wall Street: Pay Us Back petition at
www.uspirg.org/action/financial-privacy/pay-us-back. Make a sign and stand outside big banks and convince people to move their money. Be heard!