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  Wag the Dog The ‘Occupiers’ vs. the Banks
Wag the Dog The ‘Occupiers’ vs. the Banks

By Steve Viuker

Since its inception last year, the grassroots initiative Occupy Wall Street has gone downtown in a big way. The anti-1 percent folks now have office space both in New York City and Chicago.
Occupy Chicago has two units leased in the Riverfront Work Lofts. In downtown Manhattan, Occupy Wall Street has a 2,500-square-foot office on Broadway near Zuccotti Park, the site of the protesters’ original occupation.
Occupy Wall Street marked its sixth month anniversary on Saturday, March 17, in New York with a march to Zuccotti Park. Police moved aggressively, detaining 73 people and making use of force, according to reports from the Associated Press. After dark, the crowd in the park grew to more than 500.
The Wall Street Journal reported a team of about 30 people has been working through the winter months, developing high-tech tools to help coordinate demonstrations that protesters will execute this spring and summer. It ranges from Internet maps tracking police barricades to a fundraising website. The Journal says some of these tools – mapping, high-definition live-stream video, mass email list-serves and secure mobile Wi-Fi networks – will likely be used during a series of protests planned for across the country on May 1.
Christopher Guerra, an OWS activist, has told several media outlets that he anticipates the movement becoming more of a political presence as the election year goes on. Mother Jones magazine reports 10 candidates for House and Senate seats in the November elections have made OWS part of their campaigns. They include Massachusetts Senate candidate Elizabeth Warren and Hakeem Jeffries, who is running for Congress in Brooklyn.
But in the sound and fury world of social media, a big following doesn’t always translate into significant change, say many who follow the banking industry. Some credit OWS as a catalyst to get banks to implement more customer-friendly policies; others say that those policy changes have come as a result of pushback from the banks’ customers. But most agree that there’s ample evidence of OWS’ ability to foment.
“There is a huge amount of what I call ‘free floating ire’ out there,” said Davia B. Temin, president and CEO of crisis management firm Temin and Co. “People are angry. The anger can attach to whatever is sticking out at the moment, as well as to those institutions people blame for their troubles. Obviously, the biggest targets are the organizations that have seemed to prosper while individuals suffered. The largest, most high-profile organizations seem to be the targets, not community banks. BoA rightly judged the potential harm that protests – from the public at large as well as clients – could do, and changed their policies quickly. Often, it is correct and courageous strategy to listen to the public and make changes.”
“Forget the small, community banks, thrifts and credit unions,” said Andrew S. Edson, president of Andrew Edson & Associates, Inc. “The attacks on the [larger] banks garner headlines. And customers of BoA, not OWS, caused the change. Credit unions and small[er] banks took advantage of the less-than-thought-out strategy by BoA.”

99 to 1
“The real backlash seems to be coming from everyone who is working so hard to make a living,” said Temin. “They look at the OWS folks and wonder how they have time to do this.” According to Edson, “Left-leaning organizations, unions suffering from member loss, recent graduates who could not or did not find a job, new generation hippies and segments of the Democratic Party” are the core support for OWS. “Centrist and right [of center] constituents, well-educated, mainstream Americans and small business owners view them largely as unkempt and totally unrealistic,” he said. “Instead of helping to create jobs, the actions of OWS caused small businesses to close and people to lose jobs. Certain elements of the OWS credo will be integrated in the body politic of both major parties and perhaps more so with the Democrats.”
 Fraser P. Seitel of Emerald Partners believes OWS had a minimal effect. “OWS hasn’t done much with small community banks. It is so loosely structured and haphazard that its best shot for publicity – a primary aim – is the biggest banks. So the small banks get a pass. OWS can take some credit for BoA’s rollback. OWS didn’t start the controversy. But, opportunistically, it joined in, and BoA caved.”
OWS appeals most to the disenfranchised, the unemployed, the people struggling to make a living and appeals least to most people trying to make a living. OWS has hurt its cause and support most by disrupting the very small businesses it ostensibly is supporting. Wall Street small businesses got ravaged during the OWS occupation, although the local McDonald’s bathroom received significant use. When the economy recovers, OWS will be but a memory. Its lack of leadership was one crushing blow. However, in fairness, its only discernible rallying cry, “99 percent v. 1 percent,” has gotten traction and may well be a strong part of President Obama’s reelection campaign.
“Smaller banks and commercial finance groups are starting to speak up about bad service and unfair competition from the bailed out [too big to succeed] banks … and how inefficient they are. I believe the debit card reversal on the fees issue is a direct result of Occupy Wall Street and consumer backlash,” said Jeffrey Sweeney, CEO of US Capital Partners. “Wait for the weather to get better in spring and summer of 2012. The movement will explode and social media will work its organizational magic during the winter.”
A Boon for Big Banks?
Competition from credit unions and community banks might help their bigger brothers. “With a weak loan environment and a flattened yield curve, this isn’t a great time for large banks to be attracting deposits anyway,” explained Richard Barrington, a spokesperson for
“That’s why banks – and large banks in particular – are offering such anemic interest rates for deposit accounts. Losing what are generally likely to be small deposit accounts to credit unions isn’t going to hurt large banks. And ironically, in today’s environment, it might even improve their bottom line.”
“I believe the industry takes OWS seriously,” said banking consultant Charles Wendel. “But OWS seems to be disorganized and rag-tag with some issues that are mainstream and others bizarre. I visited the New York site. People were saying ‘kill bankers’ and others were talking about a 9/11 conspiracy plot. And I don’t believe banks have to be embarrassed. They are usually clear about what fees they will charge customers and the fees are major revenue sources. BoA revoked the $5 fee because customers were being smart and vocal. And the internet has allowed people to express their views and also find options; such as credit unions and community banks. Those institutions are telling customers they won’t ‘fee’ them to death and as banks such as BoA close branches, the smaller banks will remain. Credit unions are better for consumers; most can’t do business lending.”
Explained Randi Busse, president of Workforce Development Group, “I believe that it was regular customers who were fed up with big bank fees in general, as well as the specific charge by Bank of America, that had the biggest impact on the reversal of the fee by Bank of America. The number of customers who participated in Bank Transfer Day was influenced by social media. I feel that banks’ social media sites are ignoring the movement specifically and focusing more on what they are doing to be philanthropic as well as how they are offering educational programs to their customers.”
Although OWS is primarily focused on the United States, it has made it presence known in Europe as well. In London, an executive of the RBS gave up a large bonus due to protests that were going to be held in front of his residence. The New York Times reported on Occupy W.E.F., short for the World Economic Forum. The mayor of Davos, Hans Peter Michel, cleared the parking lot, offered the protesters the use of a portable cabin and helped them build igloos. But they were separated from the official proceedings by barbed-wire fences and security guards.
However, Klaus Schwab, executive chairman of the forum, invited representatives of the Occupy group to meet with him. Occupy countered by saying he could visit the camp in the parking lot. And a talk on remodeling capitalism included an Occupy representative as well as Ed Miliband, leader of the opposition Labour Party in Britain.

We Understand
Your Concern
Some of the big banks checked in with comment.
Wells Fargo spokesperson Richele Messick said, “We certainly respect the rights of everyone who has been involved in the Occupy movement. We understand the concerns that this movement has been raising. We know Americans want more from their financial institutions. These are difficult economic times that people are living in. Wells is doing home preservation workshops and mortgage modifications. We want to keep people in their homes.”
As far lending issues to small businesses, Messick pointed out that in 2011, Wells was the first bank to reach $1 million is SBA loans. “We are doing everything we can to say yes to creditworthy borrowers,” she said.
Citi spokesperson Molly Meiners supplied Banking New York with a transcript between Citi CEO Vikram Pandit and Fortune magazine Managing Editor Andrew Serwer at an event sponsored by Fortune on Oct. 12, 2011.
Regarding OWS, Pandit told Fortune, “I’d say that their sentiments are completely understandable. The economic recovery is not what we all want it to be. There are a number of people in our country who can’t achieve what they are capable of achieving. I would also corroborate that trust has been broken between financial institutions and the citizens of the US, and that it’s Wall Street’s job to reach out to Main Street and rebuild that trust. We’ve got to make sure that we deal with our customer transparently, fairly.”
Bank of America declined comment.

Five Bucks, 500 Business Cards
Patrick Cullen offers an unexpected perspective on the travails of big banks. He’s president of the Bank of Cattaraugus, on the opposite end of the bank-size spectrum from Wells Fargo and Citi. The bank is based in the town of Cattaraugus (population 900) in Cattaraugus County, in the southwestern part of the New York state and immediately north of the Pennsylvania border. Abraham Lincoln, Teddy Roosevelt, Daniel Webster and Franklin D. Roosevelt all visited the town. Think Bedford Falls, Jimmy Stewart and It’s a Wonderful Life as reference points.
“OWS didn’t affect us one way or another,” said Cullen. “But I will say that both OWS and news media are misinformed.”
Cullen, a second-generation banker, believes the problems began on the local level, and that they didn’t start at the big banks. “About 10 years ago, there were ads running in the local papers telling people they could become mortgage brokers. $4.95 got them 500 business cards. HFC and Countrywide were providing the forms to the brokers. We had three; one guy was still in high school. They were telling people to lie on their financial forms. I don’t believe the major banks were aware of the deception when they purchased those loans.”
Countrywide was the country’s largest independent non-bank lender before its January 2008 acquisition by Bank of America.

A Reputation Influencer
Summed up Davia Temin: “Every public organization is in some way thinking about how to leverage an election year. They would be naive if they did not! The social movements of the late ’60s and ’70s fizzled, but not before making a lasting societal impact. And many of the financial services CEOs I know are listening carefully. OWS is a reputation influencer.”
Indeed, a story on said OWS plans protests at the G8 Summit in Chicago and a general strike on May 1. Plans also include protests outside the Republican National Convention in August, followed by the Democratic National Convention. Organizer Austin Guest said OWS plans to protest in front of banks, as they did this winter.
“In the spring, we’re going to shut them down,” he said. “We’re going to cost them money. We’re maybe going to make them go bankrupt.”

Posted on Thursday, April 19, 2012 (Archive on Wednesday, July 18, 2012)
Posted by Scott  Contributed by Scott


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