jsmacdonald
jsmacdonald's JournalFrequently Asked Questions: Wells Fargo Divestment Campaign
Recently, Occupy Bozeman called on people to get their money out of big banks, particularly Wells Fargo. People who have learned about the campaign have been asking questions. I have compiled many of those questions and provided some answers below.
1.What is a divestment campaign?
2.What’s so bad about Wells Fargo?
3.Why Wells Fargo and not another big bank, like U.S. Bank?
4.How can a divestment campaign work against a giant corporation like Wells Fargo?
5.Is this being done anywhere else?
6.What are the alternatives to keeping my money in a big bank; are local banks okay?
7.Besides asking people to get their money out of Wells Fargo, what other actions are you planning in Bozeman?
8.How can I get involved?
9.I can’t make a meeting but have lots of great ideas. How can I help?
10.Do you have any materials that I can distribute and show my family and friends?
Links to other articles/resources related to Occupy Bozeman's Wells Fargo divestment campaign.
1.What is a divestment campaign?
A divestment campaign is a series of actions taken by a group or groups designed to get people to remove their money from some institution.
People have a lot of money put into banks. That’s most obvious through savings and checking accounts, though it could also involve stock investments as well.
In this case, Occupy Bozeman is organizing action designed to get people to withdraw their money out of Wells Fargo and to put it in some other local institution. We will be taking a series of actions, most notably a picket line, intended to convince people that they should withdraw their business from Wells Fargo.
2.What’s so bad about Wells Fargo?
There are so many reasons to get your money out of Wells Fargo. An essay I wrote on February 10, 2012 – Foreclose on Wells Fargo: So Many Reasons to Divest – goes into a whole assortment of better and lesser known reasons why Wells Fargo is a worthy candidate for a divestment campaign.
In short, Wells Fargo contributes to economic disparity in our country.They’ve done so by being a key player in the housing crisis, both in terms of the high-interest subprime loans they provided to people who could least afford them as well as in the ways they have gone about foreclosing homes.They also provide high fees and provide low rates of return.
There are a lot of other reasons as well that you can read about in the article.One of interest is Wells Fargo's $120 million ownership stake in two private prison corporations that use their profit incentive to influence government officials on crime and immigration policy.That fact alone has led groups to call for divestment from Wells Fargo.
3.Why Wells Fargo and not another big bank, like U.S. Bank?
This is perhaps the most commonly asked question and the hardest to answer. There are a lot of reasons to divest from U.S. Bank also, which we encourage. There is also a huge local connection in that Montana State University has its accounts at U.S. Bank. Occupy Bozeman has previously consented on the formation of a working group to pressure Montana State to divest from U.S. Bancorp.
Occupy Bozeman chose to focus on Wells Fargo for a few reasons. Because Occupy Bozeman wanted a deeper rather than a more superficial campaign, we believed we should focus on one bank – all while saying we believe that people should get their money out of both big national banks in town. One reason we chose Wells Fargo is that it is a bigger bank, with a larger role in mortgages and investments, which has had more national action directed at it, and more available research with which to make the case against it. Secondly, because Occupy Bozeman operates on consensus, it is simply true that the decision to take action against Wells Fargo represented the energy of the group that made the decision. On another week with a different group of people and set of facts, U.S. Bank would have been a worthy choice. If a group of people wants to dedicate themselves to a campaign against U.S. Bank, it will have Occupy Bozeman’s full support. They could even do so under the Occupy Bozeman name and use the group’s resources.
So, choosing Wells Fargo does not exclude any action against U.S. Bank.
4.How can a divestment campaign work against a giant corporation like Wells Fargo?
It is true that Wells Fargo is huge; netting more than $15 billion in income last year. The corporation has been fined or faced settlements in the billions of dollars, and yet Wells Fargo continues to churn out record profits.
Nevertheless, there is something about the nature of banks that give people leverage. Banks create credit and dole it out; they never have anywhere near as much in capital reserves as people have invested in accounts. This is why bank runs are so dangerous on the banking system. There simply is not enough cash.
If people make a concerted effort to remove their money from a bank, there is greater reason for the bank to close up shop in town. Pulling money out represents more severe stress on a bank than, for instance, a boycott on a product. Banks use your money to generate more wealth.
Pulling your money out is no harm – and actually a help to you (as you will save on fees and actually get more return on your money almost anywhere else), and the worst that can be accomplished by such a campaign is that a few more people have made better financial decisions. However, the best is also possible – that Wells Fargo will not have a viable commercial banking presence in town, that others around the country will take notice, and that the people will be able to take down one of the pillars of economic disparity and injustice in our society.
5.Is this being done anywhere else?
There is at least one specific divestment call against Wells Fargo that we are aware of from a group in Arizona. There have been numerous other actions taken by groups across the country, as well as in San Francisco where Wells Fargo has its corporate headquarters. There was also a large day of action last fall called Bank Transfer Day, where hundreds of thousands of people took their money out of big banks and put them into credit unions. In fact, credit union membership is on the rise, and so there already is some wave of action without our campaign.
Nevertheless, because Wells Fargo is still reaping in record profits and still conducting many of the same practices that contributed to the recession, there is so much work to be done.
Even without support from anywhere else, though, we should not think it impossible to make a difference here in Bozeman.
6.What are the alternatives to keeping my money in a big bank; are local banks okay?
Here I need to be clear that I’m not writing for Occupy Bozeman because there is no clear consensus on the issue of alternatives. Everyone agrees that credit unions are perhaps the best option currently available. Credit unions are not-for-profit institutions that serve member interests (as opposed to shareholder interests). They have lower interest rates, lower fees, higher rates of return, and more sustainable lending practices. The ones in this area are available to the people who live and work here.
What we do not agree on – to be perfectly frank – is the issue of local banks. Because Occupy Bozeman is ideologically diverse, some people are not opposed to banks making a profit. They argue that the key is that the banks are local and that therefore the investments the banks make with your money is local. That will in turn aid economic prosperity here.
The other view – represented by people like me – is that you should also divest from local banks because there is also an economic class gap within our local community. A local investment is not a guarantee of economic justice and because banks – whatever the type – still are beholden to shareholders rather than account holders, they still are not accountable to the people. What’s more, local banks repeatedly will farm many of the loans they give to bigger banks. So, you often end up doing business with a big bank, anyhow.
Ultimately, the lack of consensus is not troubling. That’s what you should expect. The choice is yours, and you have to decide where to put your money. If you keep it under a mattress, manage to form your own barter system with your friends, put it in a credit union, or put it some other local institution, there is wide agreement that those choices are still better than keeping money in a large corporation like Wells Fargo.
7.Besides asking people to get their money out of Wells Fargo, what other actions are you planning in Bozeman?
The first action we have planned is February 29, 2012, at Noon in front of Wells Fargo, in conjunction with a call put out by Occupy Portland. They put out a call to take action against ALEC, the American Legislative Exchange Council – basically a large group of large corporations who meet together and draft model legislation that they use to pursue their interests in Congress. Wells Fargo is not a member of ALEC. However, the Corrections Corporation of America, one of the private prison companies that Wells Fargo has an ownership stake in, is. We will be picketing and doing some other creative actions – perhaps one with an occupied Wells Fargo wagon. Details will be coming. Pickets and other actions will follow from there. We need ideas and creative energy. We’ve been talking about them at the Wednesday General Assembly meetings.
8.How can I get involved?
You can get involved in a number of ways. You can come to a General Assembly meeting, which are Wednesday nights 6:30 – 8:15 PM at the Bozeman Yoga Center, at 1716 W. Main Street, Suite 8A1. You can join our mailing lists, particularly our general email discussion list – go to http://groups.google.com/group/Occupy-Bozeman. We’re also on Facebook. All of this, of course, is available at http://occupybozeman.org.
One other way, obviously, is to come to any of our events.
You can also organize something on your own. If you have an idea, we encourage you just to go ahead and make it happen. Occupy Bozeman is not just the group of people who meet under that name. It can be you. In Bozeman, it started when some Montana State students made something happen. It can continue by you making something happen.
9.I can’t make a meeting but have lots of great ideas. How can I help?
Besides the ways mentioned in the last answer, you can share your ideas on Facebook with us, on occupybozeman.org, and on our email lists. However, if you have an idea, it ultimately is your responsibility to take the first steps to make something happen. A lot of people have a lot of ideas; what really is needed is the initiative to make an idea reality. Take the first step of getting your idea out there and stating what you need to make it happen, and we’ll do our best to help you help all of us.
As mentioned, you do not need to come to a meeting to bring an idea up or to take action – even as Occupy Bozeman. No one will be more delighted than us if you took a solid action against Wells Fargo as Occupy Bozeman (or under some other name) and that we read about it somewhere else. We are not here to increase our group’s prestige; we are here to facilitate you to have a voice.
There are only a few things that we ask you do if you do take action on your own, particularly if you are using the Occupy Bozeman name.
10.Do you have any materials that I can distribute and show my family and friends?
Besides the articles that have been written and the research on our website (see links below), other materials are in the process of being created. However, you can download, share, or print any materials you find from us and distribute those. Flyers, videos, photos, and other articles are being developed.
If you develop any yourself, I need to plug my other group – the Northern Rockies Independent Media Network. This is a great place to post all that stuff. You can do so anonymously, too. That’s at http://www.rockymt.org. If it shows up there, Occupy Bozeman absolutely will see it.
Links to other articles/resources related to Occupy Bozeman's Wells Fargo Divestment Campaign
Call to Action: Keep Your Money in Bozeman: Make Wells Fargo Pay
Press Release: Montana Group Calls for Divestment from Wells Fargo
Wells Fargo Divestment Campaign Research page
Love Letter to Wells Fargo (an immodest proposal) (by Josh Davis)
Foreclose on Wells Fargo: So Many Reasons to Divest (by Jim Macdonald)
Occupy Bozeman Braves Blizzard (by McKenzie)
Foreclose on Wells Fargo: So Many Reasons to Divest
(full links to research and claims made in the article at http://www.rockymt.org/?q=node/310 - N. Rockies Indymedia)
Foreclose on Wells Fargo: So Many Reasons to Divest
by Jim Macdonald
February 10, 2012
There are a lot of reasons to get your money out of the big banks – starting in Bozeman with Wells Fargo and U.S. Bank – but I don’t think people realize just how many reasons there are. Let’s look at Wells Fargo, in particular, where Occupy Bozeman has put out a call to divest.
I think everyone knows that Wells Fargo took over $35 billion in bailout money and is neck deep in the housing crisis – most recently being a party to a $26 billion settlement for a lawsuit brought by all 50 states regarding improprieties with foreclosures. What people don’t necessarily know, however, is Wells Fargo’s poor record on the environment, its ownership stake of corporations in the private prison industry, and charges it faces of discriminatory lending to African Americans and discriminatory practices against people with disabilities. Wells Fargo also spends a lot of the money it makes from your accounts on lobbying and political contributions. People may not know just how much money Wells Fargo makes from these practices, and they may not know that not every financial institution functions this way. There are alternatives to all these things, as well as to the high fees, low rates of return, and poor customer service that are also the hallmarks of Wells Fargo.
In brief, Wells Fargo contributes to economic disparity in this country. A first step toward economic justice in our community requires you to divest from Wells Fargo and other big banks. That will help our region, too, because it will keep your money here. More importantly, though, if a divestment campaign like this works – and evidence is that divestment campaigns like this are beginning to take hold – we will actually be taking a concrete step toward empowering the people rather than the economic interests of the one percent. It will represent a dramatic shift toward embracing an economy that considers the community stakeholders first rather than the one we have now that enriches the most affluent at the expense of everyone else.
Let us take a look at some of the reasons why you should divest from big banks in general and Wells Fargo in particular.
Wells Fargo Bank, headquartered in San Francisco, is the fourth largest bank in the United States and is the country’s largest mortgage provider. Last year, Wells Fargo’s net income was approximately $15 billion from $73 billion in gross profits.
Whatever you feel about profit, the bank ultimately is there not to serve its customers but to provide a profit for its shareholders. Therefore, there are often incentives for a bank to take actions that are not necessarily to the benefit of many of the bank's own customers.
That is how Wells Fargo has been implicated repeatedly in the housing crisis. Wells Fargo, like other big banks, engaged heavily in the subprime loans that precipitated much of the economic downturn. In fact, in July 2011, the Federal Reserve levied an $85 million fine, the largest ever of its type, against Wells Fargo for falsifying documents and pushing borrowers to the high-interest subprime loans. Worse than that, there are charges that Wells Fargo has specifically targeted poorer, particularly African American, borrowers for these bad mortgages. The charges are serious enough that the Department of Justice is currently investigating Wells Fargo on those charges.
Wells Fargo could do this to customers even if they believed that the buyer would default because it turned around and sold many of those mortgages to other investors, thus turning a profit. In many cases, the customers would have qualified for a lower interest loan, but Wells Fargo still steered people to the subprime loans because more money was to be made from it with very little consequence. For when the bottom fell out and banks were beginning to wobble and fail, most of those banks were deemed too big to fail, and so there were very few consequences. Wells Fargo received $36.9 billion in the bailout. Then, the government arranged the sale of Wachovia - a bank that was failing - to Wells Fargo in a sweet deal of about $1 per share. There were also relatively few legal consequences. An $85 million fine is nothing for a company that nets over $15 billion a year. Even a $4 billion share in a $26 billion settlement comes out to only $2,000 per person - a small consolation for ruining people's lives. It only amounts to one quarter of profits, and it was money the bank had already saved and accounted for.
The recent $26 billion settlement has to do with how Wells Fargo and other big banks dealt with foreclosing the properties of people who could no longer afford their homes because of high interest rates, a precipitous drop in home values, a lack of buyers, and the subsequent loss of jobs. Wells Fargo and other big banks often falsified foreclosure documents and repossessed homes with either fraudulent or incomplete documentation. They have also been very slow at working with homeowners on reducing their mortgage payments - part of a federal program in which Wells Fargo is supposed to be participating called HAMP (Home Affordable Modification Program).
When Wells Fargo finally forecloses on a home, many of these homes sit vacant as real estate owned properties (REOs). While Bozeman has a great shortage of space available for rent and a problem with affordable housing, Wells Fargo and other REOs sit vacant. Others are up for auction, and still others sit there with their owners waiting to be repossessed.
Most people, however, have some knowledge that Wells Fargo has been a big bank that's continued to profit despite hurting customers, particularly related to its mortgage business. However, there are even more things to consider that are less well known. Some of those are directly related to Wells Fargo's practices, some are related much more generally to the nature of banks. Not all financial institutions are the same; there are key things that make a credit union - for instance - distinct from a huge bank like Wells Fargo.
Let's start with Wells Fargo's record on the environment. When we think of banks, we do not typically think of environmental impact; nevertheless, because banks finance all kinds of projects, we can see what kinds of projects that Wells Fargo finances. All big banks brag about their environmental record, and Wells Fargo is no exception. There is no doubt that corporations have the luxury to do many things - both good and bad. Nevertheless, there are some things you might consider. Wells Fargo is a large financier of the coal industry, a distinction that led one report to list Wells Fargo as the 19th worst polluting bank in the world. The Rainforest Action Network has criticized Wells Fargo for financing illegal logging projects in Indonesia. On the issue of natural gas hydraulic fracturing (or fracking), Wells Fargo has funded Chesapeake Energy all while being one of the leading lenders who will not give mortgages for homes with gas leases. They seem to know a home where fracking occurs is a bad investment all while funding the practice.
Wells Fargo also has the distinction of having an ownership stake in two private prison corporations. They have $120 million in investments in the GEO Group and the Corrections Corporation in America. These private prison corporations house inmates and detain undocumented immigrants for a profit at government expense and use their political connections to influence policies on crime and immigration. This has been particularly true in Arizona, where the Corrections Corporation of America has had a cozy relationship with Gov. Jan Brewer and may have used its influence to pass one of the harshest and most notorious anti-immigrant bills in the country, SB 1070. Activists in Arizona have as a result not only called on Wells Fargo to divest from the private prison industry but also on customers to divest their money from Wells Fargo altogether.
If all that is not enough, last year Wells Fargo settled a case brought by some disabled customers. The suit brought by people who were deaf, hard of hearing, or have speech disabilities alleged that Wells Fargo refused to accommodate them in telephone services. This suit was settled for $16 million.
Is it necessary to add that Wells Fargo is spending more money on lobbying politicians than ever before and does its fair share of contributing to political candidates?
We could go on and on.
All of that may make no difference to you if Wells Fargo were a good choice for you and your money. Certainly, no one can compete with the convenience that big banks provide in offering many branches, many ATMs, and a wide array of financial services. Many people may opt for a big bank if they only live in the area seasonally or must travel a lot for work, if only to avoid ATM fees. Banks may stay open longer, and online banking may be more robust.
However, these positives may actually be more costly to you and yield less return than other financial choices, particularly credit unions. Indeed, report after report after report show that fees and interest rates at big banks are higher, while rates of return are lower. Whatever you save from ATM fees (and local credit unions are often part of national networks and sometimes will reimburse ATM fees), you are losing many times over in the ways that banks like Wells Fargo skim from you.
The biggest reason that a bank like Wells Fargo is so expensive relative to a credit union is that credit unions are not-for-profit financial institutions. They are not sharing their profits with shareholders somewhere else. Instead, they pass the savings to their members, who also as members have some say in their governance. Credit unions also have no incentive to ruin you through risky mortgages or other exotic financial instruments.
Something else working in favor of putting your money somewhere small rather than somewhere large is that very little of the money you put into a big bank stays in the local region. In other words, the money you spend gets put somewhere else. It gets put into the pockets of wealthy investors, into the hands of polluters, and into the hands of the private prison industry. It goes lots of other places as well, but you get the point. If you keep your money in some local context, you should better be able to take action against any abusive use of that money.
It is an understatement, then, to say that there are a lot of reasons to take your money out of Wells Fargo and other similar big banks. We have seen that although Wells Fargo has been fined or settled out of court repeatedly that these sanctions do not make a dent in their profits. The only leverage that we can exert is to make a concerted effort to divest. So long as we give permission to Wells Fargo, they will continue to engage in activities that create the economic hardships we have seen, that widen the gulf between rich and poor, that pollute our air and water, and that abuse those most vulnerable in our society. Without our money, at least they will not be able to do these things in Bozeman.
One worry about such campaigns is the fear that we may not have the power to do enough and that Wells Fargo will continue to churn out record profits no matter what we do. Fortunately, Occupy Bozeman is hardly the first group in recent months to propose divestment. Last fall's Bank Transfer Day, where many thousands of people moved their money from big banks to credit unions, was more than a blip on the radar. In fact, credit union membership is rising. So, there already is a wave away from big banks. The wave, however, is not yet big enough. We need to help it along and need to take creative action here in Bozeman that will foreclose the only properties that should be foreclosed - the big banks, starting with the biggest - Wells Fargo.
Stopping Wells Fargo by itself will not bring economic justice to our community. It will not by itself end the class gap or bring an end to the evils in the economic and financial system. However, it can be an important start toward that goal. If a bank like Wells Fargo can no longer operate in Bozeman, it will have taken massive community support. That will say at least two things. One, it will show people that Bozeman is a place that values its community and is serious about economic justice. Two, in building a strong community movement around this issue, it will provide a forum where the many other issues of economic injustice can be heard, discussed, and acted upon. We will not be a community that considers the expedience of a few more ATMS to mean more than justice.
If you want to help, it starts by getting your own money out of a big bank. It then continues by talking with your friends and sharing this and other information with them. However, more than that, there will be opportunities for more action against Wells Fargo. These things are being discussed at every weekly Occupy Bozeman General Assembly. You have the opportunity to do something. What's more, if you don't, we see what the consequences are. Because we give so much money to the big banks, a lot of people are hurting. You can be part of the solution; do not be part of the problem. It is hard enough taking on a huge corporation; it is impossible if those in our community enable them.
There are so many reasons to take your money out of Wells Fargo. For all the information we are finding related to our divestment campaign against Wells Fargo, you can start your own (and contribute to our) research at occupybozeman.org.
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