By Silla Brush - 01/10/10 05:00 PM EST
The community bank lobby and HuffingtonPost are urging people to move their money out of the nation’s biggest banks.
Liberal activists Arianna Huffington and Rob Johnson started a campaign late in December to encourage people to move their money away from Wall Street banks and into community banks. The effort, called “Move Your Money,” is an extension of criticism that Wall Street banks are simply too large and have created an era of “too big to fail” institutions.
“It was a way to kind of energize the public and give people something concrete to do with their anger at the big banks,” said Steve Verdier, the group’s senior vice president. “And so I think to that extent I think it's a potentially useful exercise.”
There are 5,000 community banks that are ICBA members. Each one operates locally and controls assets ranging from $5 million to $15 billion, according to ICBA’s website.
That compares with larger banks, such as Bank of America and Citigroup, that control trillions of dollars.
Verdier said the HuffingtonPost reached out to ICBA to see if the group wanted to participate. It’s unclear how much money would actually be transferred away from large banks, but Verdier believes the campaign could help galvanize public opinion against big banks.
ICBA, meanwhile, has its own campaign called, “My Community, My Bank,” which encourages people to write letters to their members of Congress. The effort is aimed at persuading lawmakers to limit the size of big banks.
ICBA supported legislation in the House that would give federal regulators greater power to limit the activities of the nation’s largest financial institutions even if they're not on the verge of failing. The big bank lobby came out strongly against that language, originally sponsored by Rep. Paul Kanjorski (D-Pa.).
The community bank lobby has been increasingly at odds with many other bank lobbying groups for its support of many parts of the financial overhaul effort.
ICBA is in regular talks with Americans for Financial Reform, a coalition of 200 consumer advocacy groups and labor unions.
“Very early on we started a discussion with them, ICBA, and community banks and banks that aren't playing recklessly with our money,” said Heather Booth, head of Americans for Financial Reform.
Verdier said he talks with members of the group two or three times each week.
“We share a lot of the same aims -- tougher regulations, higher capital regimes, a good resolution process for failing mega institutions,” Verdier said. “To the extent that that coalition is supporting things we're supporting and vice versa that's always terrific.”