Savings Account At Wells Fargo

Make a deposit of faith: supporting your local credit union is an investment in the community that you can bank on.

[ILLUSTRATION OMITTED]

I remember when I got my first
savings account

 passbook. I was
about 8 years old. My dad took me to the local branch of
Wells Fargo

 Bank in
Sacramento, California

 and the bank manager explained how a
savings account worked–and I had my first hint of the high math of
“compound interest.” She gave me my little blue passbook with
embossed gold lettering and showed me where to sign my name.

Most of my deposits were money accumulated from birthday gifts,
allowances, and chores. I felt proud to save this money. I was excited
to put it in the Lenten milk carton collections for children in Africa
or for the homeless, happy to make my addition to the
collection basket

 at Mass. My money was helping people–my family, my church, and people
who needed some extra assistance.

When I moved to Washington in 1986, I opened an account at a
D.C.-based bank with a branch a few blocks from where I lived. But over
the course of 20 years that bank was bought by
Bank of America

Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world.
. I
switched to another regional bank, but it was bought by Wachovia. A few
years ago, Wachovia was bought out by Wells Fargo. But it wasn’t
the same Wells Fargo I had grown up with.

Until the 1980s U.S. banks served three basic functions: providing
security for money, facilitating payment for goods or services (checks,
credit cards, wire transfers), and extending credit. By law they were
limited to operating within their state of incorporation and barred from
investment banking and speculative trading. Policies kept banks
responsible to local communities and businesses. Between 1940 and 1980
there were fewer than 260 bank failures, compared to more than 2,800
since.

The Reagan-era rush to
deregulate

To reduce or eliminate control. One of the major forces in the financial markets in the 1970s and 1980s was the federal government’s decision to deregulate interest rates.
 successfully chipped away at the
policies that made this system work. The coup de grace came in 1999 when
Congress overturned the Glass-Steagall Act. For the first time since the
Great Depression, commercial banking and speculative investment banking
could take place under the same roof. Big banks could create the
conditions for an international financial crisis with no regulator big
enough to stop them. Within 10 years we were back into a Great
Recession.

In 2009 Wells Fargo merged with Wachovia to create a
“superbank” with $1.4 trillion in assets and 48 million
customers. Along with Bank of America,
JPMorgan Chase

, Ally Financial,
and Citigroup, Wells Fargo stole the homes and life savings of hundreds
of thousands of Americans. It’s also been found guilty of charging
a higher interest rate to
African American
 Multiculture A person having origins in any of the black racial groups of Africa. See Race.
 and Hispanic home buyers and
lying to customers to secure
subprime loan

 agreements. Additionally,
Wells Fargo is the second largest investor in one of the top three
owners of private prisons in America.

As a Catholic and as an American, I was not happy with Wells Fargo.
Finally last year, I again moved my money, this time to Lafayette
Federal Credit Union.

I love Lafayette. It’s local. It’s half a block from
work. Charlotte, the branch manager, knows my name. Sometimes they even
have a candy dish with peppermints. It’s a financial institution
where I actually prefer to go inside and talk to the teller rather than
simply use the ATM. I enjoy
talking to

 the neighbors and catching up on
local news. And it pays better.

Believe me, the move wasn’t easy. In the age of
“e-money”–direct deposit, bill pay, online banking, ATMs,
etc.–it is difficult to untangle the many wires that run through one
person’s bank account. There were multiple waiting periods and
possible fines, but it was all worth it.

I had an “exit interview” with the Wells Fargo bank
manager. I listed all the reasons I thought big banks were acting as an
unregulated scourge across the American economy and that Wells Fargo had
just been convicted of practicing its own form of redlining. I told him
that credit unions were on the upswing and were hiring–maybe he could
get a job with one of them! He made a few notes and politely–and
swiftly–ushered me out of his office.

One of the first questions to ask when assessing one’s own
financial social responsibility is: How quickly does my dollar leave my
neighborhood? Generally speaking, the bigger the financial corporation,
the quicker your dollar exits.

Credit unions, as we know them today, originated in Europe in the
1800s as financial self-help cooperatives among small business owners
and farmers in particular locales, geared toward providing for and
protecting their economic sovereignty. Many of them were started by
Catholics and were based on principles of Catholic social teaching. For
example, both St. Anthony
Claret
 see wine.
 (1807-1870)–founder of the Claretians,
who publish this magazine–and Franciszek Stefczyk (1861-1924) worked in
rural areas to establish credit unions among poor farmers. Both wanted
farmers to own their farms and market their own crops, and they
understood that financial health is intimately connected with family and
local community.

As immigrant Catholics brought credit unions to America, they
became organized around seven principles that reflect Catholic teaching:
voluntary membership, democratic governance, member control of capital,
autonomy and independence, education of members and the public in
cooperative principles, cooperation between cooperatives, and concern
for the local community. Most credit unions today are still built around
these principles.

The bottom line for a good credit union is that it exists to help
people, not to make a profit. For example, I became a member of my new
credit union when I bought a $50 share. When members make deposits into
various accounts, funds are pooled together. Then the funds are lent to
other members at reasonable, lower interest rates.

As a not-for-profit institution, credit unions do not have
stockholders whose votes are weighted by the amount of stock they own.
Credit unions are democratic, one-member-one-vote institutions. My
credit union hosts a
financial literacy

 center, is a member of the
Credit Union National Association, and generates tens of thousands of
dollars for the Capital Area Food Bank.
According to

prep.
1. As stated or indicated by; on the authority of:

2. In keeping with:

3.
 the Credit Union
National Association rate index, credit unions on average pay higher
interest than banks on personal savings and checking accounts and charge
lower interest on credit cards and loans.

In his 2009
encyclical
 originally, a pastoral letter sent out by a bishop, now a solemn papal letter, meant to inform the whole church on some particular matter of importance. Benedict XIV circulated the first known encyclical in 1740.
 Caritas in Veritate, Pope Benedict reminds
us that “grave imbalances are produced when economic action,
conceived merely as an engine for wealth creation, is detached from
political action, conceived as a means for pursuing justice through
redistribution.”
In other words

, when governments don’t
properly regulate markets, then those same governments can’t ensure
that their citizens are adequately provided for.

Are all credit unions created equal? Of course not. Some credit
unions have minimized their investment in local communities. Some may
not invest according to an aggressive social screen. Some have taken on
more corporate customers or increased real estate lending portfolios,
both of which expose them to broader market risks. And they often
aren’t as convenient when it comes to online banking or ATMs
(though this is changing rapidly).

One advantage of big banks is, well, they’re big–as in
geographically spread out. If you move often it might be difficult to
maintain relationships with a local bank. And if you regularly transfer
money to accounts outside of your bank–and especially outside the
United States–you’ll find big banks can accommodate this more
smoothly.

If you consider moving your money from a big bank to a local bank,
credit union, or other community development financial institution
(
CDFI

), here are some questions to ask them: Where do you invest
customers’ funds? Did you take bailout money? Do you sell your
loans or hold them? What social screens do you have on your loans? How
do you use your profit? What are your requirements for membership? Do
you participate in “credit pools” or “shared
banking” and with whom?

The U.S. Catholic population is currently about 77.7 million, just
under 1 in 4 Americans. If every Catholic family moved its money from a
big bank to a credit union–as an act of Catholic public witness–we
could both stabilize our economy and
evangelize
  
v. e·van·gel·ized, e·van·gel·iz·ing, e·van·gel·iz·es

v.tr.
1. To preach the gospel to.

2. To convert to Christianity.

v.intr.
To preach the gospel.
 for our church. There
may even be a Catholic credit union near you.

I no longer have a savings passbook and my tithing isn’t
through a Lenten milk carton, but my money is once again helping people.
And that’s what money should be about–building strong
relationships in the service and love of God. What’s your money
doing?

By Rose Marie Berger, associate editor of Sojourners and author of
Who Killed Donte Manning? (Apprentice House). Sounding Board is one
person’s take on a many-sided subject and does not necessarily
reflect the opinions of U.S. Catholic, its editors, or the Claretians.

55% of U.S. Catholic readers say they currently bank with a credit
union or community bank.

and the survey says …

1. I currently do my banking with:

43%   A credit union.
17%   One of the big banks.
13%   A small community bank.
24%   Some combination of the
      above.
 3%   Other

2. I have moved, or plan to move, my money from a big bank to a
credit union.

Agree      54%
Disagree   27%
Other      19%

Representative of “other”: “My personal and business
banking circumstances are a nightmare of entanglements. Switching would
have to be well thought out and carefully planned.”

“I already have my money in a small community bank.”

3. Credit unions are fine for smaller personal accounts but not for
things like home loans and retirement savings.

Agree       9%
Disagree   84%
Other       7%

Representative of “other”: “It depends on the credit
union and its community ties.”

4. I couldn’t give up the convenience of having an account
with one of the big banks.

Agree :    10%
Disagree   83%
Other       7%

5. I feel more confident having my money in a big bank than having
it in a local credit union.

Agree       6%
Disagree   89%
Other       5%

6. Where I invest my money has nothing to do with my faith.

Agree      20%
Disagree   76%
Other       4%

7. I believe what caused the economic recession was:

33%   Lack of government
      regulation on big banks.
22%   Big banks' speculative
      investing.
17%   Predatory lenders.
 2%   Irresponsible borrowers.
26%   Other

Representative of “other”: “A combination of all of
the above.”

“Greed and a lack of morality.”

Result are based on survey responses from 121 USCATHOLIC.ORG
visitors. A representative selection of their comments follows in
Feedback.