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This is a post by the solutions committee.
On February 3rd, 2012 Mayor Adams introduced a resolution on Responsible Banking practices “to address some of the founding frustrations of the Occupy Movement, including economic inequity, banking practices, and the influence of corporations and money in politics.”
The resolution outlines ways in which the city of Portland can increase their investment in credit unions and community-based banks; including community investment practices in the evaluation criteria utilized to select banking services in upcoming contracts. You can find Mayor Adams’ post about it here and the full draft of the resolution here.
Occupy Portland has been asked to provide feedback on this draft, to which the Solutions Committee has responded: “Without in any way diminishing the critical significance of this resolution, the Occupy Portland Solution’s Committee believes there are changes which can make the resolution stronger. Additionally, we want to stress, that this resolution is just the first step on a path we believe Portland must forge.” You can find the full response below.
We encourage you to weigh in with your comments on this by emailing Sam Adams at by Friday, February 10, at 5 pm.
Statement RE: City of Portland’s Draft Responsible Banking Resolution
Developed by the Solutions Committee of Occupy Portland
In 2008, the economic crisis known as the Great Recession came to a head with the collapse of the national housing market. The very same Wall Street banks and financial institutions that played a leading cause in the crisis were deemed “too big to fail”, and received billions of dollars in bailouts.
On National Bank Transfer Day, November 5th, 2011, Americans from all walks of life transferred their money out of the big banks. According to the Credit Union National Association there were more than 650,000 new members added leading up to Bank Transfer day, and more than 1 million new credit union accounts opened in the last quarter of last year.
National Bank Transfer Day helped diminish the power of these Wall Street traded banks, but they are still too big to fail. They are so big in fact, that it remains difficult for credit worthy small businesses and farmers to obtain necessary business loans, just as it remains difficult for fiscally responsible Portlanders to obtain mortgage loans. These loans are just too small for the big banks to bother with. Instead, those banks invest our money overseas, or in questionable ventures such as the private prison industry, mountain top removal, and natural gas fracking. Even in rare cases when they do make these loans, they sell them as commodities and derivatives, which is exactly how we got in this mess in the first place.
The City of Portland, our Mayor Sam Adams, our Commissioners, the Treasurer, and their staff, understand that while bringing our personal money home to community banks and credit unions is critical to addressing the national issues we face, bringing our City’s money home, bringing the tax payer’s money home, is just as important.
The Responsible Banking draft resolution put forth by the Mayor and his office is an important first step to “Move Portland’s Money”. We applaud their efforts. It is a step towards ending “too big to fail”, and we believe that it will help protect, and possibly grow, our local economy.
Without in any way diminishing the critical significance of this resolution, the Occupy Portland Solution’s Committee believes there are changes which can make the resolution stronger. Additionally, we want to stress, that this resolution is just the first step on a path we believe Portland must forge.
In terms of “Move Our Money” it is important to recognize that this resolution only addresses a fraction of the city’s approximate $53 million in “checking and savings”, which in turn is only a fraction of the city’s total short-term liquid funds. The City’s current investment policy covers a total balance of investments that ranges over time from $600 million to $1.2 billion and, the city’s total net budget for FY 2011-12 is approximately $2.78 billion. This resolution is a necessary step, but there’s still much more we can do.
Ways to make this resolution better:
Support the Oregon State Bank. A state bank along the lines of the Bank of North Dakota could handle the deposits of all Oregon municipalities. Such a bank would be able to partner with local institutions to enhance their ability to lend, it would keep our money local, and it would return bank profits to Oregonians instead of dividends to the 1%. Secretary Bradbury proposed such a bank in 2010, and similar legislation passed committee in both the Oregon House and Senate last session. We believe that explicit support for an Oregon State Bank from the City of Portland would significantly help in moving such legislation forward.
In addition, we suggest adding language to this resolution that would make it clear that after the formation of a State Bank, or other similar public institution, the Treasurer should make investment with that institution a priority.
Support an investigation into a Portland Municipal Bank. A municipal bank along the lines of same lines as the Bank of North Dakota but at a local level, would be able to lead the way for municipalities throughout Oregon, and around the nation, to take positive action without having to wait on state legislation. Such a bank would not supplant a State Bank, they would in fact be able to help support each other. With our similar population sizes, it is possible, that in time, a Portland municipal bank could grow to a similar asset capitalization as the current Bank of North Dakota, truly growing our local economy.
Support loan participation and line of credit programs. These programs partner with local banks and credit unions that make local investments. These programs strengthen local banks by building their capital, which makes them them safer, able to do more lending, and more secure from take-overs. The Oregon Investment Act takes steps towards loan participation programs at the state level, we believe the City of Portland can use our local investment funds in a similar manner.
Increase Transparency. Just as the city currently provides The Budget Book and Portland Budget 101 summaries for revenue and spending, we request that the City of Portland provide financial summaries on annually about where it holds its money, and through what institutions it invests. The mayor’s office has taken steps towards that already with its Responsible Banking FAQ showing an institutional breakdown for bank deposits as of Nov 30th, 2011. We would like to see similar breakdowns in the aforementioned publications annually.
Advocate for Local Banking. In the spirit of the draft resolution’s existing statements of support for “the smallest banks” and “community-based financial institutions”, we recommend additional language be added to guide the investment locally. We suggest incorporating the language used by Multnomah County in Resolution 2010-160 which states that “Local Community Banks are banks with headquarters in the State of Oregon that have less than $1 billion in assets, are located throughout the State of Oregon and provide valuable financial services to the small business and agricultural sectors.” We further suggest that investments be prioritized in such institutions.
Advocate for Responsible Banking. Because there are very few national metrics that can be used to guide good local investment practices other than simply rate of return ( which is currently the city’s primary mechanism ), we suggest some specific language to replace the penultimate resolution in the city’s draft.
BE IT FURTHER RESOLVED that the Treasurer will research national best practices, and, develop and publish additional selection criteria for banking services, including but not limited to; community re-investment practices, small business loan programs, workforce data, in addition to mortgage and interest rates and terms. These criteria should favor local community banks and credit unions if readily available. These criteria for selection should include metrics to disfavor institutions with a history of actions damaging to the community, including but not limited to; failure to record titles properly, failure to negotiate refinancing, and failure to provide options which prevent foreclosures. These criteria will provide a reasonable basis of comparison to the extent the law allows.
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The suggestions and information presented here by the the Solution Committee of Occupy Portland are excellent. Please keep up the good work.
My personal research leaves me little hope of Portland and/or Oregon finding a “local community bank” in which to invest my money. I would like to know what bank or credit union qualifies as the banks appear to be owned by out-of-state corporations and while I am a member of a credit union I find it not much better than the “banksters” for several reasons including personal service.
It seems to me that the only answer is forming a Bank of Portland AND a State Bank of Oregon (there once was an “Oregon Bank” and that title may be copyrighted–yes, I was once a “bankster” when United States National Bank of Oregon was “locally owned”–but “they” were wannabees and not any better–note for preference for “local owned”).
Be careful, “bankster wannabees” just may not have had “enough” to play the “game”. A “buy out” is a “buy out” even if repaid with interest ($ that could have been used for, oh, let’s say, mortgages).
Again, the only answer seems to be true citizen’s banks.