Why I Switched to a Local Credit Union
For most of my life I have given my business to the big banks. In college, I had an account with Bank of America and I remember feeling great about it. After college when I moved to San Diego, I started banking with Chase, had my personal account with them for about four years, and my business account with them for at least three. I had multiple credit cards with Citi, and was really happy to have them. I generally respected all of the big banks and had never thought of doing things in any other way.
Then in 2012 while banking with Chase I learned that they, along with the other big banks, are up to some pretty shady things. Even knowing it wasn’t right, I stayed with them for a few years after that though. I was making all sorts of changes in my life to live within my beliefs, but leaving the big banks was an action that I did not take the leap on. I guess I thought I needed them to accomplish my goals. I thought they had superior online banking platforms, better service for when I traveled abroad, and more branches and ATM’s.
It wasn’t until the summer of 2014 that I finally cut all ties with the big banks and switched to a local credit union. I canceled all of my credit cards that had any association with the big banks as well.
Here’s why I decided to boycott the big banks and give my business to a local credit union:
I’ll start by sharing a quote that struck me deeply.
“The more you begin to investigate what we think we understand, where we came from, what we think we’re doing, the more you begin to see we’ve been lied to. We’ve been lied to by every institution.”
I found out that the banking institution is absolutely no exception to this. They have entire closets full of lies and cover up these appalling facts so that we blindly continue to support their corruption.
I learned that the big banks invest in projects that cause serious environmental and social destruction. Since I decided I was no longer going to be causing environmental destruction in my personal life, I of course had to stop doing business with companies that did it as well. I couldn’t just sweep it under the rug that other people were causing destruction with the money I was giving them. It should have been obvious to me though all along – of course they give money to our greatest environmental destructors. The banks mission is to make money and they’ll do that in whatever ways they can get away with. Between Bank of America, JPMorgan, Wells Fargo, Citigroup, and Goldman Sachs, they loaned about 6 billion dollars to coal mining companies in 2014 alone. Coal is the dirtiest form of energy we currently use. Many of these companies practice mountaintop removal, which is just blatant destruction of our wild lands. Mountaintop removal contaminates the air and streams, and besides it being massively destructive to the environment, health problems have been on the rise in areas with these mines. The coal that is mined is fed into power plants that make even more pollution. The big banks loan money to them as well, in the amount of about 11 billion dollars in 2014.
To give you a concrete example of this, JPMorgan was an underwriter for Indonesia’s largest coal mine. This mine polluted multiple rivers with lead (up to 18x safe limits), killed off fish (an important local food source), caused flooding (which damaged local roads) and moved indigenous people from their homelands in order to mine. Another example, Bank of America and Goldman were involved in a 1 billion dollar deal in 2013 with Coal India, whose track record includes child labor. I can’t deny that if I give them my money, then I am partly responsible for all this environmental and social destruction.
When these banks aren’t covering up their crap, they are just busy making the rich richer. The United States is seeing the greatest wealth disparity in history. 50 million Americans (that’s 1 in 7 Americans) are food insecure all while the top four banks profit about 80 billion dollars per year. Most of that money goes into the hands of the rich. The richest 1% of the United States owns as much as the other 99% combined. The 80 richest people on the planet have the same wealth as the poorest 3.5 billion people. The people at the top of the banks are in the former part of this statistics and not the latter. Big banks do not benefit the general American population. They make the rich richer and do next to nothing to help with the poor.
These banks also practice currency manipulation. In 2015 five big banks colluded to commit global theft by manipulating exchange rates, including Goldman, JPMorgan, and Citi. And some of these banks have pushed shady home loans where borrowers were paying them back without gaining any equity. People ended up owing more than the house was worth. Predatory lending was twice as likely to affect African-American and Latino borrowers. People who received the shady loans often experienced foreclosure. This was, in many cases, the bank’s fault for lying about the mortgage and upping the interest rate (source).
There’s also the laundering of money that I don’t stand for. Here’s a few examples:
–Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations. (Wachovia is now owned by Wells Fargo)
This stuff isn’t happening by accident. The more money, dirty or clean, that passes through their system the more fees they earn. The big banks have an invested interest in letting laundering slide. Plus no bankers are ever sent to jail, the bank just pays fines. Those fines are calculated risks as it’s all just a part of doing business.
Then there’s the bank bailouts that have taken place. Taxpayers have paid trillions of dollars for banks to get bailed out after their faulty business practices. It’s the average Americans that have paid for their malpractices, not them. These bankruptcies by banks that are “too big to fail” were all preventable with simply ethical practices.
Then there’s the millions they spend on lobbying lawmakers, and I’m pretty certain none of the lobbying they do is for the benefit of the environment, or the general American population. It’s to benefit their profits. In 2012 JPMorgan spent $8 million on lobbying.
To put it very simply, I just don’t support any of these things that the big banks are doing. There’s no way all this destruction is happening by accident. First, they are willing to destroy the lives of others for the sake of profit, and second they don’t do the research or take the time to consider people and the planet. By giving my money to them, I am supporting them. I decided I couldn’t do this any more and I’ve decided that I will never bank with any of these banks again.
A credit union on the other hand is something I can really get behind. So what is a credit union? I didn’t have a clue until a few years ago. This sums it up real well.
“Credit unions are not-for-profit organizations that exist to serve their members rather than to maximize corporate profits. Like banks, credit unions accept deposits, make loans, and provide a wide array of other financial services. But as member-owned institutions, credit unions focus on providing a safe place to save and borrow at reasonable rates. Unlike banks, credit unions return surplus income to their members in the form of dividends.”
Credit Unions do not have an interest in profiting billions of dollars because they are not-for-profit and they don’t live at the demand of maximizing profits for share holders. They don’t have an interest in getting filthy rich, rather they have an interest in serving their customers. Also, customers aren’t really customers because credit unions are owned and operated by the members. That’s me and that’s you, if you join one. Credit unions tend to have lower expenses and pass those savings onto their members. In general, you can expect less fees with credit unions and better loan rates.
I rest assured knowing that the money I have in the credit union is not being loaned to projects that cause serious environmental and social destruction, that I’m not contributing to the massive wealth gap in the United States, and that it’s not going into the pockets of corrupt rich dudes. I’m sure that they aren’t perfect either, and that’s why I am transitioning mostly away from money all together, but I am certain they are a far more ethical choice than the big banks. If you care about the environment or social equality, I highly encourage you to take your money out of the big banks like I did and put it into a credit union.