Why Don’t All Major Unions Own Banks?

Jon Walker
Saturday March 12, 2011
http://fdlaction.firedoglake.com/2011/03/12/why-dont-all-major-unions-own-banks

Seeing that large banks are the most powerful political entity in America and one of the only institutions members of Congress will practically trip over each other in their rush to save from their own mistakes, I’m left wondering why all the major labor unions don’t get in on the action by starting their own banks.

With control of big financial reserves and large numbers of members, the larger unions already have basically all the most important things they need to start successful banks.

Amalgamated Bank, one of the few union banks from the 1920s to survive the great depression, shows that a union-owned bank can be run successfully and not behave like a bastard to their customers.

Most big banks are jerks

Most of the big national banks have basically turned into vampires. They have handled the mortgage crisis in a manner that is often outright fraudulent, and a big part of their business model is to bleed their customers dry with fees. If all the new union banks did was run at cost, so as to give their members accounts free of predatory fees and practices, while reducing the size of the big national banks, it would be a sufficient improvement to make the task worth it.

In addition, the new union-owned banks can provide favorable loans to businesses that are unionized, new union-owned businesses, and loans to members trying to start small companies organized as worker-owned cooperatives.

Greater influence in the world of finance

That is, of course, only the potential tip of the iceberg. The union bank would gain sufficient extra additional financial holdings from members deposits, the union’s deposits, retirement accounts and even municipal holdings. They could use this to expand their political and financial influence, for example, buying sufficient shares of the large companies that are unionized to give the unions significant voting power on the boards. Voting power on the boards is a key part of both the industrial and union success in Germany. If unions can’t do it by direct law here, maybe they can do it by finance.

Given how terrible the banks are in this country, I think if the major unions put a real push behind starting their own banks, it would be very well received. While not ideal, I can see the political writing on the wall in this winner-take-all economy. Unions are in decline and under all-out assault by Republicans. They need political power, and it seems the easiest way is to steal it from the incredibly powerful banks by starting their own.

Simple unity on wages is no longer enough

As our broken political system slowly turns into a plutocracy where political power flows from the few extremely wealthy individuals and corporations, regular workers united for collective bargaining on wages is no longer good enough. Labor unions should strive to be a force for fully unifying regular people’s collective political and, more importantly, financial power.