As thousands and thousands protest Wall Street and 99% of Americans face a challenging economy, many of us have been asking ourselves, "What locally can we do to help?" Despite how we address the realities of protest camps, we should all be motivated by the pleas for a fairer, smarter economy.
Finding ways to help our money circulate locally is critical to building our local economy. Our local governments cannot control global banking or finance laws. We have few tools to keep multinational corporations from outsourcing jobs. We can do little about the growing national gap between the very rich and everyone else.
But one thing cities can do -- and that we are urging support for our City of Portland to do -- is move a meaningful portion of our public deposits into locally-chartered nonprofit credit unions and out of national banks that whisk the money to Wall Street at the speed of button clicks.
We have started an online petition building support for Portland and other cities to do that very thing. In Oregon, we can "Move our money" and kick-start the Credit Union Depository Pool, based on a bill we passed in the 2010 Legislature to allow credit unions to hold more public funds. It will put credit unions on a more level playing field with banks so they are a viable option for local government deposits.
Currently in Oregon, banks are the only institutions allowed to hold public money to any significant degree. So almost every government entity -- from the DMV to the Department of Revenue to the Oregon Ducks -- deposits its public money into a bank until it needs it. We can add credit unions to the mix and better balance our deposits. The credit unions who participate must contribute to a pool of funds that will protect the public's money.
To start the Credit Union Pool, at least five credit unions must secure commitments of more than $250,000 in deposits from a local government. Portland can be the first and extend its laudable efforts to invest in the local economy.
This effort is not merely some punishment for national banks -- a portion of our local government's modest resources won't break or make them. But moving our public money into credit unions is a solid way that Portland can help keep more money circulating locally. We can set an example for local governments across the country.
The advantages to utilizing a non-profit credit union depository include:
- A credit union may be more likely to reinvest funds within the community,
- As not-for-profit financial institutions, credit unions don't pay boards or stockholders, meaning they are able to offer depositors advantageous interest rates, and
- A credit union's earnings are more likely to stay within the local area.
Our proposal is admittedly a humble step -- it won't bring many jobs home, narrow much of the growing wealth gap, or put enough people to work. It will shift some of our deposits to local nonprofit institutions. It's a smaller proposal about a bigger thing. This century's big question is figuring out an economic future that is prosperous, sustainable, and fair. Let's help answer that question.