Proposing An #OccupyWallStreet Credit Union
Credit for this idea goes to JasenComstock.
Perhaps the primary driver of any movement targeted at “Wall Street” is a desire to replace the existing capital allocation system (the banking / investment model) with a new system. Or, at least, to improve the functionality of the existing system. If the movement wants to replace banking, it needs to offer an alternative. The best possible structure is a non-profit banking system, or Credit Union.
Credit Unions are an oft-ballyhooed mechanism for replacing banking services, but they’re often difficult to access and built on antiquated platforms. A Credit Union could be great: why not use an open-source method to develop a powerful data system underlying a capable network of branches powered by empowered consumers? But most Credit Unions are missing the most crucial component: Wall Street. You can’t invest or perform brokerage / i-banking activities, and so you can’t ever get large enough to matter.
Here are some founding principles:
1. Public action is financial action.
Everyone at Occupy Wall Street wants money out of politics. What this really means is they want influence in a system they can’t afford - so aggregate all the 99%’s money and take on the 1%. Maybe you can solve the problem that the financial system hurts the people by establishing a financial system for the people and bludgeoning the competition to death. After all, who loves their bank? Occupy Wall Street is an ideal platform for launching a Credit Union.
The advantages to operating an entity of such a nature are manifold, especially as the movement grows. Banking becomes a necessary logistic endeavor. Any jobs program or subsidy program proposed by OccupyWallStreet movement can be completely funded on a DIY basis - you just need a mechanism to collect the funds and prioritize them toward specific projects.
The best way to collect capital and invest it is a responsible, well-designed banking entity that a.) takes few risks b.) when it takes risks, takes risks that the constituent members believe in (read: are comfortable with losing money on). Think of the profits from the banking activities as a big slush fund for OWS projects. Want to clean up a park? Here’s where the money comes from. Want to hire speakers? Here’s where the money comes from. Want to feed activists? Here’s where the money comes from.
You could also do normal banking activities like offering mortgages or loans. And if you need to launch other businesses for Occupy Wall Street activities (even just to manage the inflow of food and supplies) the bank could become an investor.
2. Credit Unions can operate at low-or-no margins - especially if a collective will is embodied in the union’s business processes.
Think about this: banking is the world’s biggest consumer of technology. We in banking spend an absolute fortune on contractors for web design, engineering, infrastructure, data centers, developers, project managers, analysts, etc. Most of these are skills that Occupy Wall Streeters possess - particularly on the development and design front - that could be marshaled to prop up a credit union relatively quickly. I have a lot of licensing and could donate my time / knowledge, for example.
Collaborative tools to build the basis for a fully-electronic credit union are available for free - basically, GMAIL and Google Docs could be the entire “corporate” back-end. Open-source WIKI software could manage the data dictionary and design. Google Draw could document the process flows. It’s actually fairly straightforward if people want to put in the work; they you hook up to the exchanges / settlement systems / clearing systems and off you go.
Banking could be like any other DIY commune, honestly. Incorporate the credit union, launch a site, comply with regulatory requirements (you’re going to need lawyers), then go hog-wild offering Occupy Wall Street members world-class banking services. Go branchless and do it all online. The facilities to manage processing could all be leased cheap to start and expanded as necessary. There are so many API’s out there for various required data systems that most of the infrastructure could be built for free or quickly copied from existing systems. And improved, open-source, on the fly.
3. A bank makes your movement credible
The big difference between the Tea Party and Occupy Wall Street is the organized financial system underlying their public action. Tea Party Express and the like are extremely powerful entities. A credit union to both service the movement’s anti-banking aims and organize financial efforts toward other items suggested by the General Assembly means it’s more than just rhetoric. It’s real.
4. The right bank could reinvent social justice
Imagine a bank that doesn’t foreclose on people, or a bank that offers loans to everyone regardless of race or creed, or a bank that discards the concepts of privilege embedded in metrics like credit score and finds quality borrowers in every segment of the population. Then, imagine not taking profits from those people to buy yachts and live large, but to further expand social welfare activities.
The possibilities are really limitless, once you design and defend the financial pipeline. I know it sounds like I’m proposing becoming “part of the system” to fix the system, but really it’s more like hey, why not build the better mousetrap? Chances are, people want it.
This sounds like an absolutely awesome idea.
Granted, it would be way more work than suggested here, particularly since regulatory approval generally requires a large amount of startup capital and extensive plan details. (In BC, you are generally looking at a minimum of $1 million, held in trust, before you can start the approval process. This is probably pretty representative of North American jurisdictions.) But once you had this going, assuming the bylaws were strong enough to keep the operation on target, it would be entirely worthwhile, and almost certainly self-sustaining.
This is the kind of smart efficient protest that would actually give long-term results. If someone started this, I would try to volunteer the eff out of the asset-management end of things.
Credit Unions are also amazing regardless of whether they are connected to an overarching social movement or not. I’m VERY glad to be a member of one.