Mega-bank Goldman Sachs (assets $933 billion), has declared war on one of the smallest banks in New York (assets $30 million), the customer-owned community bank that happens to also be the banker for Friends of Liberty Plaza, Inc, also known as Occupy Wall Street. And you thought Goldman didn't care.
The trouble began three weeks ago when the occupiers suddenly found their donation buckets filling with thousands of dollars, way more than needed for their pizza dinners. Suddenly, the anti-bank protesters needed a bank. Citibank and Chase certainly wouldn't fit. So OWS opened an account at the not-for-profit Lower East Side Peoples Federal Credit Union. Peoples has a unique federal charter - designated to open accounts for low-income folk from all over NewYork, available to those families earning less than $38,000 per year. (Disclosure: the CEO of the Peoples bank is my dearly beloved ex. But that's another story.)
Goldman Sachs had also joined up with the Peoples bank. Goldman partners reportedly earn a bit more than $38k per annum, yet Goldman's association so far was limited to giving the credit union $5,000 toward the little bank's 25th anniversary celebration dinner. Goldman's largesse was acknowledged on the dinner invites - along with the night's honoree: Occupy Wall Street.
When a Goldman exec saw its gilded name next to Occupy Wall Street, the financial giant expressed much displeasure. In fact, my sources say, Goldman threatened legal action unless the credit union gave up the $5,000 and reprinted the invite sans the Sachs moniker. Goldman Sachs did not respond to our requests for comment on the affair.....
...In 2008, the US Treasury handed Goldman Sachs a check for $10bn from the Troubled Asset Recovery Program (Tarp), the bailout funds given to desperate commercial banks. ...
... Problem: Goldman has, it seems, no low-income customers, nor a "community." Goldman was directed to find poor people and a community and hand over some cash.
...So Goldman looked down from its riverfront tower in lower Manhattan and discovered Peoples. Over 80% of Peoples member-owners have low incomes. At least 65% are Latino....
...For the big money-center banks, the CRA is good deal. They pay some blood money into community banks and offload their low-income customers....
...Goldman's circuits blew when the credit union's management appeared in Zuccotti Park to endorse Occupy Wall Street's call to "Move Your Money" from commercial banks to community credit unions. Heeding Peoples' and Occupy's call, 23 protesters marched to their local Citibank branches to close their accounts - and were promptly arrested....
...Peoples' Chairwoman Deyarina Del Rio tells me that Peoples sees itself in agreement and alliance with the protesters' demands to radically shift the American finance system away from profit-first to people-first banking...
...The billions of dollars in CRA funds (Citibank alone committed $115 billion over ten years) have given community banks tremendous political authority at the local level. My sources told me that Goldman's "Urban Investment Group" representative had stated in a phone conversation that Occupy's credit union will never get another dime from any big bank, but, again, Goldman refused to speak with me to confirm or deny this.
Peoples' Del Rio dismisses such threats, but I don't. These Community Reinvestment funds ultimately come from public pockets, so why should the titans of Wall Street be allowed to bully community credit unions, which are answerable to their members, not Goldman's partners?
With additional reporting by Arun Gupta, founding editor of the Occupied Wall Street Journal.