Occupy Banking: Yes, Please
A spinoff group from the Occupy movement is seeking to launch its own prepaid debit card, as a prelude to offering a more complete set of financial services. Ridiculous? Not at all. In fact, taking over some of Wall Street's business could be the most useful thing Occupy Wall Street could do.
I mean, short of successfully starting a revolution and instituting full socialism, of course. But if we accept that the cadres of Zucotti Park are unlikely to make that happen any time soon, it makes perfect sense for the movement to try to do something practical to curb the excesses of Wall Street. Will they build their own investment bank, to compete with Goldman Sachs? No. What they can do is to build an institution that can offer the most basic financial services that most people need, to all people, for the lowest possible price. And that, it seems, is exactly what the plan is.
According to the New York Times, the prepaid debit card is but the first offering from the Occupy Money Cooperative, a spinoff group that wants to build at least a rudimentary set of alternative financial products, for the public. (There are squabbles over the use of the "Occupy" name, which are not relevant to the larger point here.) How is this different from the banks that Occupy was protesting? Well, EVIL BANKS are for-profit enterprises that seek to maximize their own profits by squeezing consumers for everything they're worth. For most people, that translates to high fees for every little service, which is, essentially, extortion by banks. It is middlemen taking as big a cut as possible of the money that flows through their coffers, with no associated benefit for the public. It is $32 billion in overdraft fees in 2012 alone.
What Occupy wants to do, by contrast, is to create a not-for-profit financial institution that could fulfill common needs—debit cards, checking and savings accounts, loans—with no profit imperative, meaning that it could be totally focused on charging the lowest possible fees. It would essentially be a credit union that was open to the public. (Were this ever to come to pass on a large scale, the commercial banking lobby would certainly have something to say about credit unions without restrictive membership guidelines. Cross that bridge later.) There is nothing inherently evil about wanting to put your money in a bank so that you can have a debit card and write checks sometimes. It only becomes evil when the banks seek to exploit their customers with outrageous fees, and to use their massive financial resources for irresponsible or socially detrimental activities. It's up to lawmakers and regulators to prevent the second part of that. But the first part—the simple soaking of customers—is something that a grass roots, non-profit financial institution open to everyone could go a long way towards remedying.
It's still more of an idea right now than a reality. But it's hardly impossible to realize. And it would save poor people money, and provide a service, and be a thumb in the eye to big banks all at the same time. So if this Occupy banking thing really gets going, please do not have a knee-jerk "BANK THING BAD" reaction. Until the glorious revolution of the proletariat etc. etc. is ready to happen, cooperative banking is a fine idea that deserves support.