November 5: Take Your Money Out of the Bank and Boycott Paypal
4 Simple Steps for Taking Your Money Out of the Vampire Banks
By Lynn Parramore, AlterNet
Posted on October 30, 2011, Printed on November 1, 2011
Can’t pitch a tent at Zuccotti Park? Not to worry. There’s
something meaningful you can do to stand up to vampire banks that bleed
the economy — and your wallet. The feeling of satisfaction amply
rewards the inconvenience.
I know. I decided to break up with my bank this week. The whole thing
was an arranged marriage from the start. HSBC and I were joined because
it gobbled up Marine Midland, the bank I actually signed up for in the
late 90s. The truth is that my bank was taking advantage of my trust and
abusing my loyalty. So I said sayonara.
Does my bank care? From a financial perspective, not really. (Although
if enough municipalities, states and big pension funds move their money,
that could start to hurt.) But breakups are bad for PR, and the
symbolic action against the menace of Too Big to Fail is good for
Bank Transfer Day is the brainchild of Kristen Christian, a 27-year-old Los Angeles art-gallery owner who picked Nov. 5 as a hat tip to British folk hero Guy Fawkes.
In 1605, Fawkes attempted to blow up the House of Lords and was
captured and executed, but not before impressing King James with his
“Roman resolution.” (When asked what he was doing with so much
gunpowder, Fawkes memorably replied: “to blow you Scotch beggars back to
your native mountains.”) If the 28,000 likes on the Bank Transfer Day
Facebook page is any indication, Christian’s idea has sparked a wave of
populist enthusiasm. We’re in a season of inspiration, and it feels good
to stand up and be counted. By something other than your vampire bank’s
actuary. Let’s get started.
1. Facing Reality
If your institution’s name is Bank of America, Wells Fargo, Citibank, or
Chase, you may skip this step. Your bank is a Too Big to Fail behemoth
that helped tank economy and used your tax dollars as a life preserver.
It’s time to sail on.
Otherwise, do a little research. My own bank, HSBC, is a bit lower down in the list, but according to Forbes magazine,
it’s the world’s second-largest banking and financial services group
and second-largest public company — what William K. Black calls a “systemically dangerous institution” (SDI). In other words, a Too Big to Fail poster child.
HSBC is guilty of several crimes against humanity, including star billing in the subprime crisis and a penchant for fighting regulation that would make the banking industry safer.
Furthermore, HSBC is currently making mind-blowing profits (they doubled
in 2010). Yet it has recently sent letters informing me of jacked up
fees on ATM usage and line of credit accounts. Why? Could it be that
HSBC is colluding
with Bank of America, which recently announced open season on customers
with its new debit card fee? Something sure smells rotten.
I therefore proclaim HSBC unworthy of our relationship. If you’re not
sure about your bank, there’s a handy tool available to help you make an
assessment. In partnership with the Move Your Money campaign
kicked off in ’09 by Arianna Huffington, economist Rob Johnson, and
filmmaker Eugene Jarecki, Chris Whalen’s firm Institutional Risk
Analytics offers a proprietary system
that grades banks using FDIC data. Simply enter your zip code and you
will find a list of high quality banks in your area. If your bank is not
on that list, take a long, hard look. Small doesn’t necessarily mean
better, which is why Whalen’s tool only lists banks which are
financially sound and FDIC insured, no matter what the size.
And consider the financial advantages
of escaping the clutches of monster megabanks. Smaller banks and credit
unions usually give you better deals on credit cards, for example,
because their business models have not relied on penalty fees and the
shady practices that go along with them. They also often superior rates
on loans and other services.
2. Finding a New Dance Partner
Whalen’s tool will also help you find a new institution. When I typed in
my zip code, a constellation of banks and credit unions popped up on a
New York City map. My next steps were to make a list of the things that
are important to me (easy walking distance, free checking, low ATM fees,
etc) and start shopping.
There were a couple of credit unions in my hood, but not really close
enough to be convenient. Even in this era of electronic and online
banking, I prefer a bank I can walk to in a jiffy. Some of the small
banks nearby required minimum balances on checking accounts, which
spells fees, so I crossed them off the list. After comparing offerings
online, the bank that seemed to fit my requirements was Amalgamated
Bank, with two branches within 10 blocks.
Other than its extremely ugly name, Amalgamated is known as America’s
only union-owned commercial bank, started in 1923 by the Amalgamated
Clothing Workers of America to serve working people. Labor unions,
despite their flaws, remain a key force against plutocracy. So
Amalgamated certainly beats HSBC in terms of social value. It also has
free checking, lower out-of-network ATM fees ($1) and no minimum balance
required on either checking or savings accounts.
You may fear a lack of ATMs with smaller banks, but Amalgamated, like
many, is part of a huge, surcharge-free network called AllPoint, with
machines at Target, CVS, Walgreens, and other common retail outlets.
There are over 4,000 Allpoint ATMs in New York and New Jersey, and
there’s a web tool and mobile app that allows me to search for nearby
machines wherever I am. With the ridiculous $2.50 charged by HSBC on
out-of-network ATMs, I’m actually a lot less likely to incur fees with
Amalgamated. The deli right across the street from my apartment has an
AllPoint ATM. Yippee!
Bonus: Amalgamated is actually the bank used by the Occupy Wall Street
movement, and advertises signs supporting the protesters at locations
near Zuccotti Park. This cheered me as I headed to the not-so-fancy main
branch on 7th Avenue in Manhattan. To my surprise, no one at
Amalgamated had ever heard of the Move Your Money campaign. The young
manager who helped me stared blankly as I told her all about it and
peppered her with questions. An older manager quickly appeared
explaining that the young woman was a manager-in-training who likely did
not have Protest 101 as part of her curriculum. The more experienced
manager had not heard of the campaign either, but she was vaguely aware
that some folks were upset about “uh, which bank was it with those debit
fees?” Okay. A little cluelessness and a surprising lack of PR acumen.
But there were pro-labor signs on the wall and I got lots of spiffy
brochures on services like free checking — which includes actual
rebates on debit card use rather than fees. Sold!
3. Planning Your Exit
You’ll want to keep your current checking account open for a little
while in order for any outstanding checks to clear and to allow time for
a new account to be set up. But you can go ahead and close down your
savings account. It took me exactly ten minutes to do that at HSBC and
put a stop on the automatic monthly transfer from my checking to my
savings account. You can get your money in cash or just transfer
everything over to your checking account.
I had a fantasy of going all 99 percent on the folks at HSBC, but the
only people at my branch were two friendly women behind the counter and a
couple of tellers. When asked why I was closing my savings account, I
politely mentioned the new fees and noted the rather low (practically
non-existent) interest rates. They just smiled and assisted me. It was
The next step was to open a checking and savings account at Amalgamated.
If you do automatic bill paying, you will have to switch those systems
over, and that’s a bit of a hassle. Banks know this, which is why they
encourage customers to use them. If you have allowed any businesses to
directly debit your account, contact those businesses and provide them
with your new bank’s information. You’ll also want to ask your employer
to reroute your paycheck if you use direct deposit. Your new bank will
provide you with an authorization form. Then you can order your new
checks and debit/ATM cards, which will typically arrive within 1-2
weeks. You should also consider ordering a new credit card and getting
rid of your old one.
4. The Final Good-bye
Once direct deposits are going into your new account and you’ve made
sure that there are no outstanding checks or automatic debits that need
to clear, go ahead and close your old checking account. But make sure
you follow your bank’s produces for doing this or you could end up with
fees for having an empty of inactive account.
I found that the whole process was actually pretty painless. Rep. Brad Miller (D-NC) has introduced a bill to ban nasty practices like exit fees to make ending your dysfunctional bank relationship even easier.
Having taken the plunge, I invite you to join me. The water feels good. And even better, no sharks.
Lynn Parramore is an AlterNet contributing editor. Follow Lynn on Twitter: twitter.com/LynnParramore
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