Bonfires and fireworks are what most people associate with 5 November. But this year the date has taken on a new meaning for thousands planning a mass boycott against some of the largest banks in the world.
Angry at corporate greed and unethical financial practices, over 60,000 have vowed to close their bank accounts on Guy Fawkes Day, pledging to transfer their money to local credit unions and co-operatives as an alternative.
The campaign was launched on 3 October by 27-year-old Los Angeles-based art gallery owner Kristen Christian, and has since gained backing from protesters involved in the anti-corporate “Occupy” movement in cities across America and Britain.
Christian was prompted into taking action after being repeatedly charged fees by the Bank of America that she felt were excessive. She started an event page on social networking website Facebook called “Bank Transfer Day”, which gained near-immediate popularity, spreading virally over the internet in a matter of days.
“I was tired of paying outrageous fees to banks for a severe lack of services,” she says. “The final straw came with the announcement of new monthly fees for any customers with less than $20,000 (£ 12,500) in combined accounts. It’s apparent this new policy directly targets the impoverished and working class.
“The structure of for-profit corporate banks is fundamentally flawed and a hindrance to a thriving economy. The goal of Bank Transfer Day is to shift funds to the local level before 5 November. These funds will allow credit unions to expand low-interest rate loans to private citizens and small to medium-sized businesses, encouraging economic growth on the local level.”
Credit unions, cooperative financial institutions owned and controlled by their members, are expected to enjoy a huge boom in the lead up to the boycott. Some have announced that they will be opening extended hours on 5 November, a Saturday.
“The anti-consumer practices of the large banks aren’t a new thing,” says Greg Smith, the president of PSECU, one of America’s largest credit unions. “Consumers are fed up, and we want to let them know that there are financial institutions out there like credit unions that can provide the same products and services their bank does, but instead of gouging them, we will do it fairly.”
Though Bank Transfer Day began as a campaign directed as a protest against US banking institutions, it has tapped into to a strong anti-banking sentiment also widespread across Europe.
London-based organisation Positive Money, which campaigns for banking reform, was quick to lend its backing. The group is encouraging British citizens to transfer their money from big banks such as Barclays and HSBC to smaller, mutually owned “ethical” institutions or building societies such as the Cooperative and Nationwide.
“Customers today don’t have any rights to say what their money can be used for. So the banks can use this money to invest in the arms industry and for projects that are damaging for the environment and for society as a whole,” says Mira Tekelova, a spokeswoman for Positive Money.
“Bank Transfer Day is about encouraging our supporters to chip away at the power and influence from the big banks by simply withdrawing financial support. It’s just a small step of what needs to be done.”
The campaign has come in from criticism from some, who have claimed it could lead to greater instability of an economy that is already failing and on the brink of possible collapse. However, according to Albrecht Ritschl, a professor of economic history at the London School of Economics, the boycott is not likely to bring about a major crisis.
“I could not imagine that this would be a big enough movement to really have far reaching consequences,” he says. “If they find enough people to join the boycott, then of course the boycotted banks will get into trouble because they will lose lots of deposits.
“If they concentrate on one particular institution, and the institution is small, then they could probably sink it. I would tend to think, though, unless I’m entirely mistaken, that this particular boycott movement will probably only have punctual or limited impact.”
Ritschl added that the ongoing protests were not likely to spark any self-regulated change from within the banking sector, but could force politicians to introduce stricter rules regulations to appease public anger.
“I don’t think these protests will be entirely ineffective,” he says. “They do keep the discussion about bankers, the role of banks and the financial meltdown alive. They will add momentum to the quest for radical banking reform and bankers’ compensation schemes, so in that broader political sense I would tend to think that yes they will have an impact.”
Many of those participating in Bank Transfer Day have already taken it upon themselves to close their accounts – though some have been obstructed their banks.
In October two women entered a Bank of America (BoA) branch in Santa Cruz, California, carrying a sign that read, “I am closing my BoA account today.” The police were called and the women were made to leave the branch after they were reportedly told by a member of staff, “you can’t be a protester and a customer at the same time.”
The bank said in a statement: “We do not allow protestors inside of our banking centres. If a customer who is participating in a protest wishes to conduct bank business, including close an account, we ask them to come back when they are not protesting or they may also conduct their bank business at a nearby branch away from protest activities."
One man the banks will have difficulty stopping from closing his account is Alex Schaefer, who is fully committed to the 5 November boycott. The 41-year-old American artist has become notorious in recent months for painting pictures of banks on fire – a symbolic reflection of US society’s incendiary anger over the financial crisis.
“It’s been slowly dawning on me since about 2003 or 2004 that the financial sector is totally out of control,” says Schaefer. “The ratings agencies [which assess the financial strength of companies] aren’t doing anything and the politicians are completely bought off. In my opinion they’re just sailing the ship into destruction.”
Shaefer, who previously worked as a video games artist for Disney, was questioned by police in July after he was spotted painting a picture of a burning bank in Burbank, Southern California. The authorities suspected he could be a plotting terrorist attack.
He explains: “They asked me ‘do you hate the banks?’. I told them: I don’t hate the banks but I think everybody is sick of this criminal business model that they’ve been operating for the last twenty years.
“Here are banks that are stealing and gambling billions and trillions of dollars, totally bailed out on the pocketbooks of the people. So why aren’t those guys getting their doors knocked on by the police. It’s an imbalance of justice.”
A similar bank boycott, Move Your Money, was launched in 2009 by the editor-in-chief of the US blog Huffington Post, Arianna Huffington. It encouraged Americans to put their money into credit unions to protest against risky investments made by bankers that led to the US government’s $700 (£440) billion bailout in 2008. In a televised interview last year, Huffington said: “We've had lots of good speeches and lots of good rhetoric, but this is an opportunity for people to take action.”
This article first appeared in issue no.900 of The Big Issue in the North.
British banks respond
A spokesperson for the British Bankers' Association, which represents over 200 banks from 60 countries, said: "We believe that people don't need to resort – as in that other famous 5 November protest – to lawlessness and violence to make their point. Everyone has the right to peaceful protest which doesn't impede other people getting on with their lives. It may come as a surprise to you that we also believe that, if you are unhappy with the service you get from your bank, you should shop around for one which suits your needs better or for alternative sources of finance if a bank overdraft or loan is not for you."
Where it began
Much of the anti-banking sentiment that has led to Bank Transfer Day can be traced back to 2008, when the global economy entered its worst crisis since the Great Depression in the 1930s.
A number of complicated factors led up to the crisis, which began in America: the deregulation of banks allowed the financial sector to engage in riskier investment practices, while there was also a boom in lending to less creditworthy borrowers. Ultimately, large financial institutions such as the Lehman Brothers collapsed, and housing market fell into decline, causing evictions.
To prevent further collapses, governments in countries across the world were forced to produce bailout funds to rescue banks on the brink. In the UK alone more that £850 billion has been spent for this purpose. Despite the banks' undisputed role in causing the economic crisis, their executives have continued to take home massive paypackets, fuelling widespread public revulsion. Royal Bank of Scotland (RBS) executive Ellen Alemany, for instance, received £1.8m in 2010. RBS is to date the recipient of the world’s biggest bail-out, at a cost of £45 billion to the UK taxpayer.