WATCH: Members Of Congress Talk About Moving Their Money To Small Banks
Members of Congress considering moving their money from major financial institutions to community banks have some of the same concerns ordinary customers do, according to interviews progressive video blogger Mike Stark conducted this week on Capitol Hill.
The Huffington Post searched financial disclosure forms filed by members of Congress and found that at least 53 senators use one of the nation's biggest six banks for their personal accounts. Information wasn't available for another 17. In the House, at least 104 members use big banks; at least 119 already use only small banks or credit unions. Information wasn't available for the rest. [Scroll down to find out where your senators and representative bank.]
Rep. Jan Schakowsky (D-Ill.) told Stark that she began looking into moving her money from big banks to small ones when she heard about the campaign and thought it was a "great idea," but wanted to look into it.
"I have some questions to ask about the online banking capacity and the debit card use, etc., but I'm pretty excited about the idea," she said.
Huffington Post editors and economist Rob Johnson launched a viral campaign in December, urging people to move their money from bailed-out, too-big-to-fail banks and put it in small community banks or responsible credit unions.
Stark filmed nine members of Congress; all but Rep. Mike Castle (R-Del.) endorsed the idea.
Castle is running for Senate in Delaware, a state with a heavy concentration of credit card companies thanks to its lack of consumer protection laws.
"I don't think a movement like that is going to make much difference, but it'll obviously get some publicity and attention," Castle said. "My banking is done with local banking anyway."
Castle dismissed the notion that consumers should punish major banks, which took taxpayer money and then cut lending, raised credit card interest rates and showered executives with billions in bonuses. "These institutions are still vitally important to the economy of the country and they're going to be there whether some people transfer their assets or whatever. Remember, they're dealing in many instances in large businesses and large accounts and that kind of thing," he said. "They haven't failed at it. I mean, there's some arguments both ways. The small banks haven't done that well, either."
Several members of Congress said they once had their money in community banks, but that those banks were taken over.
"My bank that I have now, which is now Bank of America, started out just like that, as a community bank. And then it got bought up. And then it got bought up. And then it got bought up. And now it's swallowed into the too-big-to-fail banks," Schakowsky said.
Rep. Tim Bishop (D-N.Y.) said the same thing happened to him. In order to keep his money in his hometown, he'll have to keep it in a big bank. "I have money in what started out as small, community banks that have now been bought up by larger banks. I'm a lifelong resident of my little hometown and I've tried to bank in that little hometown and so I have local banks that, as I say, have now been bought up by larger banks," he said.
Stark asked Bishop if he'd move his money. "You know, I'll take a look at it but I think it's unlikely that I'll move things from where they are," he said, while backing community banks in general. "It's telling that the community banks have really weathered this storm reasonably well."
Rep. Dan Boren (D-Okla.) said he couldn't move his money to a small bank -- because he's always been in one. "The larger banks are some faceless institution...For my money, I like to know that Dale's on the other line," said Boren. "That's how it should be for everybody."
The enthusiasm for the movement of money was bipartisan. Rep. Tom McLintock (R-Calif.) praised the idea in full-throated free-market terms. "It's a great idea. I think the most important consumer protection that exists is the word no," he said. For now, he felt protected enough, he said. "It's all a trade-off. It's a question of what services do I get versus what risks do I take. I'm perfectly satisfied with my current arrangement." (Deposits in community banks, credit unions and big banks alike are protected up to $250,000 by the Federal Deposit Insurance Corporation.)
Rep. Cynthia Lummis (R-Wy.) said she already uses a community bank and Rep. Glenn Thompson (R-Pa.) said he uses community banks and credit unions. "In Wyoming, we only have community banks," said Lummis.
Castle, however, is unconvinced that the people will act collectively against the big banks.
"I just don't think it's very likely to happen in terms of any kind of a major movement as far as the country is concerned," he said.
Members of Congress are required to report where they hold their deposits. Huffington Post's Jeremy Binckes sifted through the disclosure documents and compiled spreadsheets that can be found here for the House and here for the Senate. Your member may not have disclosed; if an account holds less than $5,000, it can be kept private.
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First Posted: 03/22/10 06:12 AM ET Updated: 05/25/11 04:15 PM ET