Wednesday, January 06, 2010

Become a Market Force: Move Your Money

California attorney, Ben Pavone is fed up. He says he's not going to pay his credit card bill until Bank of America lowers his interest rate and hikes his credit limit. He claims Bank of America raised his interest rate and lowered his spending limit to just above his balance without explanation. I can certainly relate as the same exact thing happened to me, and I'm sure to millions of other people as well. No, Mr. Pavone is not the only one who is fed up and he's not the only one taking action.

The campaign to move money from giant banks to local community banks and credit unions is spreading quickly. But not all community banks are risk free. Some of them got involved in the same risky behavior that took down some of the biggest banks. provides a zip-code tool ( which sifts through every active bank and thrift running calculations to identify the very top of the industry performers so you can visit these banks.

The big banks on Wall Street, propped up by taxpayer money and government guarantees, have had a record year, making record profits while returning to the highly leveraged activities that brought our economy to the brink of disaster. In a slap in the face to taxpayers, they have also cut back on the money they are lending, even though the need to get credit flowing again was one of the main points used in selling the public the bank bailout. But since April, the Big Four banks -- JP Morgan/Chase, Citibank, Bank of America, and Wells Fargo -- all of which took billions in taxpayer money, have cut lending to businesses by $100 billion.
"Community" credit unions are another great alternative. Most are open to anyone who lives in the community, and they offer free checking, great service and will reduce that ever-growing anxiety about gratuitous fees. Here's the link to check on credit unions: National Credit Union Administration (NCUA)

The elimination of usury laws in America initiated an era of deregulation that allowed financial markets to run wild, leading to today's economic crisis. The Industrial Areas Foundation started the “10% Is Enough" campaign, listing four reasons why interest rates should be capped at 10%.
1) Moral and civic prohibitions against usury stretch back deep into our religious and national history. Our prophets and founding fathers made the clear case long before us that usury is patently wrong, against God, and against our national interest. From the time of Hammurabi to the Carter administration, usury was illegal. Modern practices of usury are an aberrant blip in history.

2) Our people are hurting because of crushing debt loads exacerbated by exorbitant interest rates – in the form of high credit card premiums, payday loans, banking and check-cashing fees, sub-prime mortgages, rapid-refund tax return schemes, car-title scams, and other practices that seek to generate income off of financial misfortune.

3) The elimination of usury laws in America from 1978-1980 ushered in an era of deregulation that allowed financial markets to run wild, accelerating the present economic crisis.

4) The elimination of usury laws helped shift the investment of American capital and talent away from manufacturing and material innovation and into an unproductive financial sector based on trading paper rather than producing long-term wealth. That shift has damaged other sectors of the economy, decimated America’s labor force and weakened America’s position in the world.

What we need now more than thousands of pages of new regulations, or the sour faces of executives forced to reduce their eight-figure salaries to a mere seven, is a 10% cap on interest rates. Why 10%? Because 10% is enough. Ten percent puts proportion and equity into the relationship between the lender and the borrower. Ten percent restores our capacity to form right relationships.
Did you know that Bank of America's executive bonuses alone could have paid the entire foreclosure crisis? Did you know that Bank of America, after receiving bailout money courtesy of we, the people, adjusted only 100 mortgages in total? Did you know that the banks are not living up to their end of the bargain by refusing to lend to worthy small businesses and individuals? What choice do we have?


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