By José A. Giralt
At a public meeting billed as a “Boroughwide Town Hall on Public Banking,” representatives from ten Bronx-based groups joined various elected officials to push for State and City legislators to build upon efforts to promote worker-owned businesses, increase community land trusts, and facilitate access to more local credit unions as an alternative to big commercial banks.
On May 11, inside the auditorium of the Bronx Library Center, located in Fordham Manor, attendees viewed video and slide presentations describing how these actions could improve economic conditions in the borough.
Listed as expected attendees on the press release announcing the event were elected officials, State Sen. Robert Jackson (S.D. 31), Assembly Member George Alvarez (A.D. 78), Assembly Member Karines Reyes (A.D. 87), Assembly Member Amanda Septimo (A.D. 84) Assembly Member Yudelka Tapia (A.D. 86).
Also expected were representatives from Banana Kelly Community Improvement Association, Bronx Financial Access Coalition, Green Worker Cooperatives, New Economy Project, New York Public Interest Research Group, Northwest Bronx Community & Clergy Coalition, which recently celebrated its 49th anniversary, NYC Network of Worker Cooperatives, Public Bank NYC, Solar Uptown Now Service (SUNS) Cooperative, and University Neighborhood Housing Program (UNHP), which recently celebrated its 40th anniversary, as reported.
Danielle LeBlanc works with Green Worker Cooperatives, consulting with small businesses, start-ups, and nonprofits on marketing and proposal development. “The fight for a public bank is a fight to transform our financial system, not just to change where and to which communities investments go, but to ensure that we, the people, have a voice in those decisions,” she said. “It’s a fight for economic democracy.”
LeBlanc described a financial situation where every year, New York City “collects $100 billion in revenue from taxes, fees, and other sources.” She said, “Before it spends any of that money, by law, it has to place it on deposits in the big banks.” She then described a dire situation at play between the big banks and some local communities. “These are the banks that have systematically underserved Bronx communities in terms of branch locations, and loans to local people and small businesses,” she said.
According to activists like LeBlanc and Gregory Jost of Banana Kelly Community Improvement Association, the main complaint against the big banks and even the check-cashing stores is that their fees for late payments and check-cashing services disproportionately affect lower-income people.
Add to that payday loan services that sometimes charge an annual percentage rate (APR) of 400 percent, as referenced in prior press release on the topic by former Gov. Andrew Cuomo, and it becomes clear why some people have trouble climbing out of crippling debt.
According to the U.S. Consumer Financial Protection Bureau, while there is no set definition of a payday loan, it is usually a short-term, high-cost loan, generally for $500 or less, that is typically due on your next payday.
Collections on payday loans were made illegal in New York State in 2013. While this measure prohibited the offering of such services at the street/retail banking level, borrowers sometimes find such loans online, though illegal statewide.
At the federal level, the U.S. Department of Justice (DOJ) oversees the growth of the big banks to make sure no one institution monopolizes a market. On June 20, Assistant Attorney General Jonathan Kanter spoke before the Brookings Institution, a Washington D.C.-based entity which, according to its Facebook page, conducts “independent research and analysis on the most important policy issues in the world.”
Kanter said the DOJ plans to look more closely at efforts from big banks to grow even bigger through mergers and acquisitions. “We’re not going to artificially limit ourselves to just one or two dimensions of competition,” he said according to reporting by Politico.
The “one or two dimensions” Kanter was referring to were traditional factors like deposit concentration and the physical location of bank branches, when trying to determine if a bank will gain an unfair advantage through expansion. Other factors might include fees charged, interest rates, customer service, and even the impact an approved expansion may have on nonbanks. “All we’re saying is that we’re going to look at all the competitive factors,” Kanter said.
While these efforts at the federal level principally impact the biggest banks, local activists like LeBlanc and Jost are more focused, however, on what New York City and State can do on a smaller scale. They have called out the big financial institutions on what they deem to be an abandonment of working and lower-class communities. Data published on NYC.gov reveals that Bronx Community District (CD) 3, 5, 6 and 12 hold the highest percentage of unbanked households in The Bronx.
CD3 covers some or all of the Crotona Park East, Claremont, Concourse Village, Melrose, and Morrisania neighborhoods, CD5 covers some or all of Fordham, Morris Heights, Mount Hope, and University Heights, CD6 covers some or all of Bathgate, Belmont, East Tremont, and West Farms and CD12 covers some or all of Edenwald, Wakefield, Williamsbridge, Woodlawn Heights, Fish Bay, Eastchester, Olinville and Baychester.
The same data shows that ten individual City neighborhoods account for nearly 37 percent of unbanked households. These include Bedford Park (CD7), Fordham North, Norwood (CD7), Belmont, and Fordham South.
A recent example of how depositing City funds into a small local bank can benefit an underserved neighborhood is what happened in Bronx CD1, which covers the South Bronx. In April, NYS Superintendent of Financial Services Adrienne A Harris announced that a Popular Bank branch would be included in the Banking Development District (BDD).
According to NYS Department of Financial Services, to encourage participation in the BDD program, $10 million in subsidized public deposits and other benefits are made available to banks and credit unions that open or maintain a branch in underserved communities and offer access to affordable products and services.
Bronx Borough President Vanessa L. Gibson praised the collaboration. “I wish to congratulate Popular Bank in being a part of the solution and partnering with our neighborhoods on this important mission of improving affordable banking services and financial security,” she said.
Public banking advocates want to see more support for their cause of having local communities involved in banking decisions. Jost is also an adjunct professor of sociology at Fordham University. He sees more opportunities for community engagement when residents support smaller financial institutions like the Lower East Side People’s Federal Credit Union.
First organized in 1986 as a non-profit financial cooperative, Norwood News reported on the institution’s expansion into The Bronx last summer and the launch of the Bronx People’s Federal Credit Union. With its distinctive white and green van, it has since brought mobile banking services to many neighborhoods in the borough.
“Instead of extraction and exploitation, we have products and services like affordable savings and free checking accounts, credit builder loans, credit repair, surcharge-free ATMs, auto loans, [and] personal loans,” Jost said. He sees The Bronx’s can-do spirit as a great asset in building wealth at a grassroots level.
“Most of our financial systems [are] in support of the big banks, not the little ones,” Jost said. “How do we turn the tables? How do we shift the balance of power in a way that helps ‘the little engines that could’? We all know what it is to tough it out and make it; that’s how The Bronx [works]. This is our story; so why don’t we have some backing from our existing taxpayer dollars to help us grow and thrive and do better?”
As reported, on Thursday, May 18, the New York Episcopal Federal Credit Union (NYEFCU) was officially launched at the campus of St. James Church in Fordham Manor. The Rt. Rev. Andrew ML Dietsche, the 16th Bishop of New York, and Heyd were present on the day to launch the credit union and ceremonially open the first accounts.
According to a March 2023 annual estimate report annual estimate report by NYS Comptroller Tom DiNapoli, Wall Street’s 2022 average bonus paid to securities employees dropped to $176,700, a 26 percent decline from the previous year’s $240,400 average bonus.
*Síle Moloney contributed to this story.