Its not just consumers who are sick and tired of high fees and poor customer service, cities want to save its citizens money too. For example, Portland Oregon Mayor Sam Adams recently proposed that the city move $250,000 (which is the insured maximum) from large multi-national financial institutions to community banks and credit unions.
"I believe we should do as much business locally as is feasible, as a city and as individuals," Adams told the Northwest Credit Union Association. "I've long had a 'buy local' passion. This isn't to take away from national or international corporations. Responsible banking is one of the reasons I was attracted to and supported Occupy Wall Street."
Currently $7.2 million of Portland’s money is parked in a Wells Fargo account after the bank won a public bidding process in 2009. Additionally, Portland-based Umpqua Bank holds approximately $30 million.
Adams posted the “Responsible Banking Resolution” on his website on February 3 which proposed that cities should consider moving money to local financial institutions for the greater good. An excerpt in the document states, “Investments in credit unions and community-based banks have been correlated with positive impacts on local economies and job creation, through increased proportion of loans to local businesses and focus on local customer needs.”
The resolution refers to the Center for State Innovation, which stated that every $10 million in state deposits transferred from large, multi national banks to in-state financial institutions produces five to eight jobs.
The resolution draft was created with the assistance and input from numerous groups including Working Families leaders, Oregon Banks Local, the Oregon Bankers Association, the Move Your Money movement, Occupy Portland representatives, State Treasurer Ted Wheeler's office, Oregon Representative Jefferson Smith, Multnomah County officials and Chair Jeff Cogen's office, and representatives from credit unions, small and large banks and the community at large.
Occupy Portland Solution’s Committee believes that moving money from mega banks to credit unions is only the first step. In a statement sent to Adams the group submitted, "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 resolutions stronger. Additionally, we want to stress, that this resolution is just the first step on a path we believe Portland must forge."'
Beyond this initial move, the Occupy Portland letter suggests broadening the amount of money moved to community banks and credit unions to eventually create a Portland Municipal Bank geared toward handling all of the city's financial needs.
Financial Institutions Respond to the Proposal
In response to the recent activity, Wells Fargo Oregon President Don Pearson also sent a letter to Adams stating that his bank meets the definition of “local” based on Adams’ proposal because all loan decisions are made on a local level and deposits are maintained in the Portland market.
“The main advantage right now is the whole concept of local - local decisions, local employment and local community involvement/giving,” she explains. “It's basically a political message because it is a very ‘loud’ voice from the community, especially here in Portland. Our rates are also still slightly higher than the multi-national banks but not by much and they are all so low that it doesn't really make too much difference. As rates rise, however, that would change and the credit union advantage could add up in terms of better interest as well.”
Kresl says that what’s happening in Portlandia could eventually prove to be a national trend. She says that her credit union had been talking with Mayor Adams’ office since last fall about this topic and has already received funds from the City of Beaverton and Salem as well as Multnomah County(part of Portland). “As to whether or not there is a national trend, I'm not sure to be honest. I think that in areas where the ‘local’ theme is strong, most definitely it is a trend.”
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