Is New York City government climbing on board with the Move Your Money movement?
In his State of the City Address on Wednesday, Mayor Bloomberg announced that New York would seek to deposit $25 million of its municipal tax dollars in neighborhood credit unions. As the Mayor admits, this is a small proportion of the city's resources: New York City isn't about to divest from Wall Street. But a multi-million dollar deposit will be a big deal for the under-capitalized community-serving credit unions that reinvest their funds in New York's neighborhoods. And it's right in line with Move Your Money's focus on shifting resources away from too-big-to-fail banks toward institutions that invest in their communities. If individuals can make an impact by moving their money, how much more can cities do?
As One City One Future - the collaborative group of advocates who initially proposed the credit union idea for New York explain: "Community credit unions... offer small personal loans -- for home improvement and education, for example -- often not available from for-profit banks; they establish relationships with customers and help promote local businesses and community based organizations; and they assist people in building credit and assets."
This is the type of Main Street investment communities across America badly need to create jobs. And it's something we used to demand that large commercial banks do as well. As my colleague Mark Winston Griffith points out (pdf) the much demonized Community Reinvestment Act mandates that banks invest in local revitalization efforts - it was only after banks strayed from this mission, trading the mortgages of lenders and brokers not covered by the CRA, that housing bubble profiteering took over. Mark makes the case for mandating a new community reinvestment mission at big financial institutions. But in the meantime, it's good to hear the even New York City is moving some of its money to local credit unions that are already investing in communities.