see here (http://www NULL.nplusonemag NULL.com/images/Gazette4 NULL.pdf). HIghlights include an article by Occupy SEC member Alexis Goldstein

and an article by Doug Henwood (who runs the left business observer) that is critical of the move your money campaign.

Thanks to Sue Waters for this.

1. We invited Vikram Pandit to speak with us again. See this wonderful invitation on occupy.com (http://www NULL.occupy NULL.com/article/dear-mr-pandit-lets-seize-moment).
2. It got picked up by Lisa Pollack at FT Alphaville (http://ftalphaville NULL.ft NULL.com/blog/2012/04/26/976361/dammit-pandit-we-wanna-talk-to-you/).
3. Michael Hudson recently spoke at the INET Conference in Berlin sponsored by George Soros and the speech is on his site, michael-hudson.com (http://michael-hudson NULL.com/).
4. Occupy Town Square (http://www NULL.facebook NULL.com/events/366361363399336/) will be held Saturday, April 28th in Union Square from noon-8pm and there will be lots of May Day preparations.
5. Lots more activities for May Day described in the OWS Newsletter (http://ows NULL.occupy NULL.li/civicrm/mailing/view?reset=1&id=69).
6. The hoodies are in! Cathy will bring them to Sunday’s meeting.
7. Cathy will also bring Alt Banking coffee mugs to Sunday’s meeting ($10 each).
8. The first part of the PBS Frontline Series has been posted online (http://www NULL.pbs NULL.org/wgbh/pages/frontline/money-power-wall-street/), with accompanying interviews posted here (http://www NULL.pbs NULL.org/wgbh/pages/frontline/oral-history/financial-crisis/). The second part, which features Occupy the SEC as well as Alt Banking, will be aired at 10pm on May Day.

The Alternative Banking Working Group of Occupy meets every Sunday from 3-5pm at Columbia University, in Room 1401 of the International Affairs Building at the corner of 118th and Amsterdam Avenue.

We are open to everyone.

We usually send out topics on Saturday and ask for more topics. To get on the list please email cathy.oneil@gmail.com and request to be added to the email list for Alt Banking.

The format of the meetings are as follows:

1. We list the topics and discuss them briefly to give people an idea of what they are.
2. We vote for the topics to see who wants to discuss what.
3. The top 4 topics (up to 6) are chosen, and we have two rounds of discussions in which people are free to choose whichever topic they choose.
4. People take minutes and when the groups are large enough someone takes stack as well.
5. After the two rounds, we have a quick summary of the discussions.
6. The minutes are posted here (http://www NULL.nycga NULL.net/groups/alternative-banking/forum/) after the meeting.

See you there!

Post by FogofWar.

Moving your money from a megabank to a credit union or community development bank makes for a good sound bite, but is it really an action that can have an impact in the right direction?  I think so (although the matter is not free from doubt), and thought it would be worthwhile to lay out thoughts on the subject as a follow-up to the “What is a Credit Union?” post.

I’ll focus this discussion on credit unions, rather than community development banks or smaller locally owned banks as that’s where my knowledge lies.

Credit Unions are not Too Big To Fail

A quick google search indicates the largest credit union in America is Navy FCU (http://creditunionaccess NULL.com/top50creditunions NULL.htm) with $34Bn in assets. (Internationally, it may be the Dutch Rabobank (http://en NULL.wikipedia NULL.org/wiki/Rabobank), although I’ve never gotten a good handle on whether Rabo is still a cooperative or not.) Individual credit unions fail regularly, just like individual banks, but there isn’t one CU that’s in danger of crashing the entire financial system in the same manner as BAC, C, JPM or WF.

During the 2008 crisis and aftermath the only credit unions that got a federal bailout were the corporate credit unions (http://www NULL.mint NULL.com/blog/saving/credit-union-bailout-09282010/). There’s a good article about that here (http://online NULL.wsj NULL.com/article/SB10001424052748703499604575512254063682236 NULL.html).  The corporate credit unions definitely got into trouble buying structured products and I don’t want to gloss this fact over.  There’s a split between the retail credit unions, who are going to have to pay for these mistakes, and the corporate credit unions which made the bad investments as well as the NCUA, who was asleep at the switch when the corporate CUs were making that investment.  Also worth noting that the NCUA has filed suit (http://online NULL.wsj NULL.com/article/SB10001424052702304070104576397590007402016 NULL.html) against the banks for selling crap product to the corporate CUs.

The corporate credit union bailout was small proportionate to the overall credit union size.  $30 bn of  gov’t backed bonds equates to $270 bn proportionate for banks—less than ½ of the official state of TARP and a small fraction of the overall size of the taxpayer support given to the large (non-CU) banks indirectly through TAF, TSLF, PDFC, TARP, TALF, etc.,… (see this (http://www NULL.investopedia NULL.com/articles/basics/09/understanding-bailout-acronyms NULL.asp#axzz1baL5YBAn) for an explanation of term).

All in all, I’d say CUs come out somewhat ahead by this measure.

Volker Rule/Glass Steagall

Unlike commercial banks, credit unions never revoked the Glass Steagall act and remained segmented as “pure” traditional banking entities.  This means that CUs don’t mingle traditional banking (deposits, checking accounts, loans to customers), with investment banking activities (IPOs, M&A advisory) or derivatives trading or sales desks, let alone prop desk frontrunning of client information (http://www NULL.zerohedge NULL.com/article/goldman-admits-frontrunning-clients-through-its-prop-desk).

There’s a lot of ink out there on Volker and Glass Steagall.  In short, it seems like a good idea, if not sufficient as a complete solution, to keep traditional banking segmented from investment banking and proprietary trading.  The core point is that trading risk should not infect the core banking business putting it (and the taxpayer standing behind the federal deposit insurance) at risk.  Very good recent example of this here (http://www NULL.bloomberg NULL.com/news/2011-10-18/bofa-said-to-split-regulators-over-moving-merrill-derivatives-to-bank-unit NULL.html).

CUs come out dramatically ahead on this measure.

Lobbying—just as bad?

Credit Unions do lobby, largely through two groups, CUNA and NAFCU.   In fact, NAFCU has been an opponent of the CPFB (http://www NULL.nafcu NULL.org/Tertiary NULL.aspx?id=22330&libID=22348 NULL.), and the CU lobby got itself removed (http://www NULL.forbes NULL.com/sites/moneybuilder/2011/07/12/banks-should-love-the-feds-durbin-amendment-ruling/) from the debit swipe fee cap.

There was a time I can remember when CUNA and NAFCU just went up to the hill to remind Congress that they existed and defend against the ABA’s occasional attempts to change the tax status of CUs.  It seems times have, rather unfortunately, changed.

Regrettably, no advantage to Credit Unions here.

Part 2 will talk about investments in local communities, democratic control (the good, the bad and the ugly) and securitization/mortgage transfers.

FoW

This is a post by FogOfWar:

There’s been a call (http://www NULL.facebook NULL.com/event NULL.php?eid=281139538577206) (associated with the “Occupy Wall Street” movement) for consumers to move their bank accounts from large TBTF banks into local credit unions. Nov. 5^th is the target date. This is a similar message to one Arianna Huffington gave (http://www NULL.huffingtonpost NULL.com/arianna-huffington/move-your-money-a-new-yea_b_406022 NULL.html) a few years back.

The above inspire a quick post on the subject of “What is a Credit Union and why is it different from a mega-bank?”

What can I do at a Credit Union?

Pretty much all the same stuff you can do at a bank. They have checking accounts (although they call them “share accounts”, it’s the same thing), savings accounts, CDs, credit cards, debit cards, auto loans, mortgages, lines of credit. All of the stuff a normal bank offers. Some of the smaller CUs (just like some of the smaller banks) don’t offer everything, but it’s substantially the same.

The only difference in services is that you generally can’t make investments (stocks, bonds, etc.) through your credit union. IMHO, this isn’t much of a downside, as the brokers associated with major banks generally aren’t as good as the standalone retail brokers (like Fidelity, Vanguard, TIAA-CREF, etc.)

The other difference is that you can’t just walk off the street and open a credit union account; you have to be eligible in their “field of membership” (more on that below).

How are the rates?

It varies, but in general you’ll get better rates at a credit union than at a bank (certainly than at a megabank). An easy way to check is to look at your checking account statement now (or call your bank) and see what the APY is (Annual Percentage Yield), and then check the credit union to see the APY on their basic share draft account.

There are credit unions with sucky rates out there (often the really small ones—they have a lot of operational costs), but I’ve usually found that I get better rates on savings and better rates on loans from a CU.

What’s the real difference?

The real difference is ownership. Banks are owned by outside investors—usually people who own the stock for a big bank—and they need to pay those owners a profit in the form of dividends (or share repurchases which are economically equivalent). Credit Unions are owned by their depositors (called “members”). That’s why the “checking account” is called a “share account”—you own a “share” (another name for stock) in the credit union. The board of directors is elected at an annual meeting, one person, one vote. BoD members are not paid for serving on the board.

This also explains why Credit Unions can offer better rates: they don’t have to pay a profit to their stockholders, instead that “profit” is returned back to you, the owners. Note that CUs are also exempt from corporate tax, and this makes some difference, but IMHO, it’s the absence of needing to pay dividends that really gives CUs the ability to pay better rates to their customer/owners.

Am I supporting the community when I deposit with a Credit Union?

There’s a good argument that yes, you are. Credit Union’s make loans back to the people in their membership. So the money you put on deposit is being leant back to people in the community of the credit union. Credit unions don’t trade derivatives or run speculative investment books. By and large they make loans to members and then hold on to those loans (i.e., they don’t “securitize” those loans out to other people).

For those who know the movie It’s a Wonderful Life, it’s a pretty good description of how a credit union can work within a community. Technically the movie describes a Thrift (somewhat similar), but it could just as easily been about a CU.

Who is eligible to join a Credit Union?

Each credit union has a “field of membership”. Some are employment-based, so you are eligible if you or an immediate family member works at a certain place. For example, NBC has a credit union for its NY employees. Note that NBC does not own the credit union, the CU is owned by its members (one person, one vote), it’s just that the credit union is there for NBC employees.

Some credit unions are associational. A good example of this is church credit unions (which are pretty common). There are also Community Development Credit Unions, which are set in lower-income areas and anyone in the area can join (Lower East Side People’s FCU is a good example).

There are a number of educational credit unions—these vary, but often faculty, students, employees and alumni are all eligible to join. Again, note that the university does not own the credit union—the CU is owned by the members—it’s just the prerequisite to join that particular credit union.

How do I find a credit union I can join?

There are some “credit union locators” online, but the one’s I’ve seen kinda suck. I’d say try a Google search. So if you live in Boise, I’d search for “Boise Credit Unions”. You can also try www.ncua.gov (http://www NULL.ncua NULL.gov/), which will give you all the credit unions in a particular area. I tend to like the larger credit unions (at least $20m in assets), as they tend to have hit a size where they’re operationally more together (making mistakes on your money is no fun).

You can also ask at the HR department at your job “hey, does working here make me eligible to join a credit union?” If they say “no”, you can say “why not? Is anyone working on having us join up with a good CU?”

Are there any downsides?

There aren’t a lot of ATMs, so every time you need cash & use a bank ATM, you’ll be paying that ridiculous fee. This can definitely suck, although one way around it is to have a debit card and take cash back all the time when you buy stuff (there’s no charge for taking cash back on a debit card—it’s just a question of whether the merchant lets you do it, and most supermarkets and drug stores do).

Also, this makes depositing paper checks a pain in the ass: you actually have to put them in an envelope and mail them to the credit union. How did society function before we had the internet?

Also, if it’s a work credit union, you can check to see if they have a branch at your office—this can make things a lot easier.

Anyway, that’s a quick rundown. Sure I missed something, but I’ll drop it in the comments if I remember later.

Here’s a flyer I made for OWS which contains information on a few credit unions in New York City:

FoW

1. Alexandria from Alt Banking is taking a survey for her research, please help her out: http://www.surveymonkey.com/s/WFCQBHW (http://www NULL.surveymonkey NULL.com/s/WFCQBHW)
2. From Sue: there’s a link to conference calls (student debt etc.) here: http://interoccupy.org/
3. Also from Sue: a reading list centered on the creation of debt and money on our blog, posted by Nathan.
4. From Joe Sucher: he’s written two stories about Louise Davidson, currently living in her jeep, outside her Loma, Colorado home and wants us to spread the word: http://www.americanbanker.com/bankthink/does-fannie-have-no-heart-1048200-1.html (http://www NULL.americanbanker NULL.com/bankthink/does-fannie-have-no-heart-1048200-1 NULL.html)
5. Tonia is asking for people to read the Usury Law document which she’s now updated with lots of history of credit cards as well as pros and cons for Usury Laws. Please read it for two weeks from yesterday’s meeting, so by April 21st: http://www.nycga.net/groups/alternative-banking/docs/usury-laws-research-v-2-work-in-progress (http://www NULL.nycga NULL.net/groups/alternative-banking/docs/usury-laws-research-v-2-work-in-progress)
6. Katya’s document about securitization is here. It engendered a really interesting and useful discussion about messaging yesterday.
7. Hannah wants us to know about an event centered on the land-grab of Africa by financial insiders (see below).

BIBLIOGRAPHY – compiled by Sue Waters

PUBLIC VS PRIVATE CONTROL OF MONEY CREATION

www.monetary.org – website of the American Monetary Institute; supports public
education and reform of monetary system to debt-free money

www.positivemoney.org.uk – British monetary reformers for debt-free money

www.oneradionetwork.org, ‘The Real World of Money’ weekly show with Andrew Gause,
monetary historian shares his knowledge of the workings of the private-owned Federal Reserve Banks

The Lost Science of Money, 2002, by Stephen Zarlenga; traces history of money and centuries-old struggle between public versus private control of money; gives historical proof of integrity of government control of money issuance

The Creature from Jekyll Island, 4th Ed., 2002, by G. William Griffin; exposes secret history of the creation of Federal Reserve System and other historical events related to the Fed

Web of Debt, 4th Ed., 2010, by Ellen Brown; historical analysis of the American money system of private debt-money

Federal Reserve Exposed: Collective Speeches of Congressman Louis T. McFadden, 1970; lone voice in Congress in 1930’s against the private control of money by the Federal Reserve Banks

The Economic Pinch, 1923, by Charles A. Lindbergh, Sr., father of the aviator; fought the Federal Reserve Bill in 1913 and continued to fight against the private control of our money system for decades afterwards

100% Money, 1935, by Irving Fisher; one of the most respected economists ever; he explains why private banks should not have the power to create money

A New Monetary System, 1861, by Edward Kellogg; analysis by NY businessman to explain the economic suffering around him; proves that any interest rate greater than 1% will concentrate wealth

The Populist Moment: A Short History of the Agrarian Revolt in America, 1978, by Lawrence Goodwyn; analysis of the farmers’ mass movement in the 1880’s and 1890’s, which sought to change our money system to debt-free money from the US Treasury

History of the Great American Fortunes (Vols 1,2,3), 1908, by Gustavus Myers; history of the US system of propertied classes and their influence over laws and government from 1608 to 1908

Seven Financial Conspiracies Which Have Enslaved the American People, 1896, by Sarah E. V. Emery; description of 7 manipulations of national monetary laws through secrecy and stealth by the private banking and propertied classes between the Civil War and 1875

The Federal Reserve System: Its Purposes and Functions, 1958, S.W. Adams – Adams takes the
official publication of the Federal Reserve System from 1939 (which was subsequently edited by the
Fed to remove certain revealing facts) and Adams identifies and comments on the missing excerpts.