Friday, November 4, 2011
Groups Call for Responsible Banking from Public Institutions
Post by the Hawthorne Hawkman, video posted on NCRC's Facebook page by Molly Glasgow, and on Youtube by ytsirkredyns. More pertinent pictures are at the NCRC Facebook page, but those have been copyrighted and I do not have permission to use them at the time of this post.
The Northside Community Reinvestment Coalition met a while back at the Minneapolis Urban League in partnership with Jewish Community Action to learn about and observe Sukkot. We heard calls from religious leaders of many faiths as our community strives for social justice. And then, as is our tradition over north, we put those words into action.
NCRC and other community leaders marched into the TCF branch in Cub Foods and US Bank on Broadway to present letters demanding that two sheriff sales be delayed while loan modifications are worked out. We've employed this strategy before, albeit less directly. The coalition frequently gathers signatures and support from community members and organizations, and send them off to banks and servicers, requesting that a foreclosure be delayed and a loan modification be put in place.
Similarly, the Occupy Minnesota movement has pressured US Bank into delaying a foreclosure date. But pushing for loan modifications and foreclosure delays on a case-by-case basis is very inefficient and doesn't come close to saving enough people's homes. That's why both NCRC and Neighborhoods Organizing for Change (NOC) are calling for...
...our public institutions to engage in responsible banking initiatives. Our city councils, counties, public schools, parks, and other government entities use millions and millions of our tax dollars, and hold those funds at various banks. US Bank and Wells Fargo are the two most commonly used. These banks are profiting from the fees charged for their services surrounding these funds, and well they should. However, when that happens, they ought to be accountable to the source of those funds - the taxpayers.
NCRC is in discussion with Hennepin County officials about including responsible banking language in the county's banking services RFP. We're asking for something pretty simple: whoever receives the fee income from Hennepin County banking services should disclose how many foreclosures they do in the county and how many loan modifications they do. These stats should be broken down by zip code so that we can see how the banks are serving the areas in the most need. If the proposal takes off, the long-term goal would be to have banks compete with each other over doing more to save homeowners in order that they would be considered eligible for the income derived from taxpayer funds.
Minnesota Neighborhoods Organizing for Change (NOC) is taking a similar approach, albeit more direct. They released a study that claims foreclosures have cost the Minneapolis Public Schools $150 million, and that Wells Fargo is responsible for $28 million of those costs. The full study can be found here. That report borrows heavily from a previous study done by CURA. Essentially, foreclosures in Minneapolis have significantly impacted families with children in public schools. That causes the families to move elsewhere, and then with fewer students enrolled in the school system, MPS funding decreases.
As a result, NOC has called on the Minneapolis Public Schools to divest from Wells Fargo. The question then becomes, and put that money where? The catch-22 we often hear is that the larger banks are the ones with the capacity to perform services that large government institutions need, at least for the price they are able to charge. But if the true cost to communities is greater than those savings, then it would certainly be time to look for other financial institutions to provide these services.