Join the American Postal Workers Union, AFL-CIO at an informational demo at Staples in Berkeley and El Cerrito this Saturday, August 9, 2014 at 12 noon at 2352 Shattuck Ave in Berkeley and at 2:30 pm at 11545 San Pablo Ave in El Cerrito.
In its continuing attack on postal workers and on the public service, the U. S. Postal Service has cut a deal with Staples to provide postal services at Staples stores. Postal Jobs must be maintained as good jobs that pay a living wage. Our communities need more, not less, living wage jobs!
Visit www.stopstaples.com to learn more and get involved.
Public Finance Feasibility Study for the City of Vallejo
This is the public finance feasibility study we submitted for the City of Vallejo’s participatory banking initiative. We hope that this and our check-cashing project (see previous post) will both be submitted to the voters of Vallejo for funding.
Stronger Democracy, Stronger Bottom Line:
A Feasibility Study of Public Finance for the City of Vallejo
This project proposes a feasibility study of publicly owned and operated financial institutions for the city of Vallejo. When cities are mere customers to Wall Street banks, they often lose money on unnecessary and overpriced financial products and services, and they are rarely able to wield the financial clout that government assets should merit. Creating public financial institutions helps governments manage money responsibly, keep income local, and hold financial costs in check, while providing local communities with affordable financial services and transparent oversight. This study will offer a site-specific and pragmatic account of the types of public finance institutions that will keep profits within Vallejo, expand loan programs to local businesses and contribute to the City of Vallejo’s general fund.
In the slow recovery after the Great Recession, there is widespread dissatisfaction with the current state of banking in America and a corresponding increased interest in complementary options. Cities from San Francisco to Montpelier are taking initial steps to build public banks, while smaller municipalities from Reading, Pennsylvania to Richmond, California are exploring fiscally sound alternatives to Wall Street’s business as usual. This project brings Vallejo into that conversation by commissioning a feasibility study of publicly owned and operated financial institutions that would be appropriate and profitable for our city.
According to a report issued by UC Berkeley’s Haas Institute1, Vallejo is second only to Victorville in the state of California for the highest incidence of negative equity in housing. Nationwide, Vallejo is 25th on the list of 100 Cities with the Highest Incidence of Negative Equity. Because private banks continue to allow our underwater homeowners to languish without redress, public finance institutions are an exciting, emerging alternative.
Vallejo needs public finance alternatives tied to the specific economic needs of our city. Banking laws vary by state and local regulations and charter differences are substantial. Vast differences in local economic and political conditions create demand for certain services in some places but not in others. Thus no public bank can work equally well in every place. This study would recruit a leading expert in the field of public finance to collaborate with local citizens, business leaders and government representatives to explore exactly which forms of public financial institutions would be best suited to the city of Vallejo.
While San Francisco, Santa Fe, Philadelphia, and Seattle, among other large cities, as well as the state of Vermont, are considering full-fledged public banks, the economic and demographic specifics of Vallejo point toward other public finance institutions, as reported by Tom Sgouros2 and introduced briefly below. Each of these would add accountability to specific aspects of financial markets, could save money for city government, and would redirect capital to important local needs. Each is premised on the fact that increasing democratic accountability in our financial system helps governments and the communities they serve.
Community Development Financial Institution Plus (CDFI+)
Vallejo has already successfully established the Grow Vallejo Fund Loan Program and Opportunity Fund, among other community development initiatives. These initiatives could be strengthened and others started with reliable year-to-year access to sufficient capital. Under the CDFI+ model, a pension fund or other part of the government with the ability to make long-term un-collateralized investments could offer equity capital to buy T-bills or make a deposit with the Federal Home Loan Banks. Using this capital as collateral, the CDFI+ could then accept deposits from other parts of the city government and provide a series of laddered investments to the CDFI+. The CDFI+ would enhance already-existing programs that make credit markets more sustainable and responsive to local needs, and thus more accessible to Vallejo’s citizens. It would also provide new opportunities for local economic growth un-tethered to the vagaries of state and national government programs.
Local Financial Service Bureau
Collateral requirements push cities to bank only with large Wall Street firms. But sufficient deposits can be aggregated to fund a stand-alone cooperative that would contract directly with smaller financial industry vendors to manage the City of Vallejo’s accounts. This Local Financial Service Bureau would allow the city to patronize banks that keep money circulating locally, and would offer the city more leverage in demanding better banking service via competitive bidding. In this model, the City of Vallejo can also lead participating banks in a cooperative effort to participate in lending initiatives like citizen energy efficiency or lead and asbestos abatement programs.
Cooperatively Owned Financial Advisor or Underwriter
Governments hire financial advisors because they need expertise in banking and financial markets, but often they cannot afford, or do not have enough need to establish, a permanent staff position. Consequently, cities often resort to the costly advice of experts who have no fiduciary duty to the city or its residents, and even may have a conflict of interest. For instance, Bank of America underwrites bonds, so when a B of A financial advisor suggests floating a bond to the city, who are they working for? A coalition of cities and counties that would include Vallejo would be able to afford to have such expertise on their staff, unconflicted and with the cities’ best interests as their fiduciary and professional duty.
These are just a few of the possible public finance institutions for Vallejo that this feasibility study will explore. This study, conducted by one of the field’s foremost experts, will assess exactly what kinds of institutions would best serve Vallejo, and how to go about establishing them. Once selected, the best options will take time and effort to establish, and will then benefit Vallejo long into the future - until our children’s children are worrying about the economic well-being of their children. This is not the bonus-driven timeline of Wall Street banks; municipal government is in a position to take a longer, more balanced view, for stronger democracy and a stronger bottom line.
1 Haas Institute For A Fair And Inclusive Society, Underwater America, How the So-Called Housing Recovery is Bypassing Many American Communities. Berkeley, CA, University of California, Berkeley, 2014.
2 Tom Sgouros, Checking The Banks, The Nuts and Bolts of Banking for People Who Want to Fix It. Providence, RI: Light Publications, 2014.
This is the proposal which Strike Debt Bay Area submitted through Vallejo’s participatory budgeting process for a vote of the people of Vallejo, along with a detailed budget. We hope to know soon whether or not we got through the screening process, which is the last step before being on the participatory budgeting ballot. If we get through the screening and are selected by the voters, Vallejo will provide a few hundred thousand dollars (really!) to make this happen.
We also submitted a proposal for public finance research, which we will post here soon.
A non-profit community check cashing service in Vallejo would serve the public, especially the unbanked public (usually the poorest residents) by providing an alternative to for-profit check cashing services, without the predatory high fees charges by for-profit check cashing businesses. This business would also provide other services such as assistance in opening bank accounts, financial coaching, credit repair loans, and other financial services to Vallejo’s unbanked and underbanked citizens.
A nonprofit check cashing business, operating with a completely different set of values than market rate stores, can assist low income, unbanked people in understanding their financial situation, saving money, developing improved financial habits, entering the financial mainstream, and moving out of poverty.
Presently, the fringe banking industry (which consists of check cashers, payday lenders, pawnbrokers, rent-to-own stores, car title lenders and similar operations) earns exorbitant profits from the low-income people they claim to serve, becoming an obstacle in the path of anyone needing these services from moving out of poverty. Households using these financial services are often racial/ethnic minorities, immigrants, and/or low-income, paying stratospheric fees and interest rates that transfer a large percentage of the customers’ wages and payments to the business owners. The existing industry provides no mechanism to help low-income customers learn about their own situation, let alone move into the financial mainstream .
In contrast, a nonprofit check cashing storefront can offer the same financial services at much lower costs, leaving substantial funds in the hands of the people who need it. Such a store would provide financial counseling and planning through classes and one-on-one sessions, small business assistance, and referrals to partner banks and credit unions. This organization also would operate with greater transparency, a benefit to its customers and the city of Vallejo.
One of only a tiny handful of nonprofit check cashing stores in the United States operates in Oakland and has been serving the Fruitvale neighborhood for over five years. It is our partner in this proposal. It operates several clusters of programs located in its storefront:
Below-market rate financial services, including check cashing, bill payments, money orders, money wiring, and debit cards;
Affordable short-term payday loans, accompanied by coaching to help people reduce or eliminate their dependence on these loans;
Very low cost credit repair loans (about a 12% APR) to assist people with paying off other debts, and gettting out of the borrowing cycle;
Larger, longer-term and lower-cost installment loans than can be obtained elsewhere;
Financial coaching and financial literacy training designed to assist low-income households in developing their wealth-building and money-management capacity. The program responds to short-term crises and creates longer-term, individualized financial plans for each participating household; the service, which is provided for a nominal fee, also includes ongoing monitoring and follow-up.
Small business assistance through below-market rate bookkeeping and financial coaching services, to help the businesses develop proper methods of planning, creating systems, etc.;
Social services assistance through information and referrals for housing, immigration services, food, legal services, employment and other forms of assistance.
Consumer and business loans, and assistance in opening checking and savings accounts offered through referrals to bank/credit union partners.
This comprehensive set of services helps households move into the financial mainstream. In Oakland, these programs have already proven to save customers $150,000 to $200,000 annually.
Banks and credit unions are incentivized to partner with nonprofit check cashing businesses because financial services create a cost-effective means of reaching an unbanked or underbanked population. Referrals for store customers to partner institutions can create new, long-term institutional customers. Increased business and revenue may be generated in the short run as customers use the banks’ services, mostly smaller loans and checking/savings accounts, and become more accustomed to working with a conventional financial institution. The nonprofit organization’s financial coaching helps bring more educated customers and businesses to the banks, facilitating the banks’ business model of encouraging their depositors to make larger transactions such as home mortgages, car loans and business loans.
Market-rate stores owners are often absentee, or are part of national corporate organizations; their excess (and excessive) profits are drained from the community. In contrast, customers of a nonprofit check cashing business have more money available because of the lower-priced services, which they can spend on local goods and services; thus, the City’s tax revenue increases, which helps save jobs and fund City services.
The nonprofit check cashing store is designed to generate enough revenue to be self-sufficient after an initial start-up period or to be able to raise grants and donations to cover shortfalls until self-sufficiency can be reached.
Implementing partners: 1
The nonprofit organization which runs the Oakland store will be working with Vallejo residents and others to leverage existing knowledge and expertise in opening a second business. The proprietor of the Oakland store will divide his time between Oakland and Vallejo, at least in the build-out and first operating year of the project, and will be responsible for the setup and running of the check cashing service.
RALPH NADER WILL SPEAK ON THE STEPS OF THE DOWNTOWN BERKELEY POST OFFICE
ABOUT THE POST OFFICE, PRIVATIZATION OF OUR PUBLIC GOODS
AND SERVICES & THE FIGHT TO DISMANTLE THE CORPORATE STATE
TUESDAY, JULY 29th
MUSIC FROM 2:00 PM TALK AT 2:30 PM
2000 Allston Way, Berkeley, CA
“Postmaster General Donahoe has demonstrated that he lacks the political courageto stand up to Congress and tell them that theycaused this mess and they need to fix it. Instead, time after time, he has chosen to take the easy road and dismantle the USPS piece by piece – whether it is by cutting post office hours, closing post offices, cutting service and delivery standards, increasing postage rates, or now ending Saturday delivery.”
Save the Date: Organizers' meeting, 7/19, 3:00 p.m.
The Strike Debt Bay Area organizing group will meet at Oscar Grant Plaza (aka Ogawa Plaza) in the amphitheater or on the front steps of City Hall, Saturday, July 19, from 3-5:30 p.m. If you have specific questions for a smaller group, or just want to know a few people before the meeting starts, email me at my personal email address below.
Activism on such a big issue can use as many people and talents as we can find. If you are excited by the idea of Strike Debt, and/or our many projects, which include organizing for public banking in Oakland, participating in Occupy San Francisco’s third anniversary convergence, securing funding from the City of Vallejo for nonprofit check cashing and public finance study initiatives, saving the Berkeley Post Office and stopping the Staples non-union takeover of good Post Office Jobs, working with the City of Richmond and other municipalities for eminent domain seizure of underwater mortgages from the banksters, and much more.
Also, we’d love to meet you at Oakland’s First Friday, on July 4, when we will have an information table at the holiday gathering (roughly 4-7 p.m. in downtown Oakland).
Save the Date: Planning Meeting, Saturday, June 28
The Strike Debt Bay Area organizing group will meet at Oscar Grant Plaza (aka Ogawa Plaza) in the amphitheater, Saturday, June 28, from 3-5:30 p.m.
We are always looking for new people to join us, and work on our many projects, which include saving the Berkeley Post Office, organizing for public banking in Oakland, getting funding from the city of Vallejo for nonprofit check cashing (and public bank study initiatives), working with the City of Richmond and other municipalities for eminent domain seizure of underwater mortgages from the banksters, and much more.
Save the date now, so you’ll be free to join us in three weeks!
Oscar Grant (Ogawa) Plaza, Amphitheater in front of Oakland City Hall.
Join Strike Debt Bay Area in working on some exciting projects locally and nationally to fight unjust debt.
The latest on our coalition efforts to Save the Berkeley Post Office and fight the privatization of our commons.
The latest on our efforts to help Richmond and NGO allies push for principal reduction for Richmond’s homeowners. Read two articles here and here, written by two Strike Debt Bay Area members on the Richmond principal reduction / eminent domain case.
In addition, we are exploring the use of a public bank to help Richmond, CA and other communities escape the thrall of Wall Street.
A project to bring non-profit, non-usurious payday loan services to Vallejo and Oakland.
Other projects include efforts to fight against student debt in conjunction with peeps at UC Cal via a Strike Debt UC Berkeley chapter of Strike Debt, a book group with semi-weekly discussions, investigations into the legitimacy of mortgage ownership and therefore the right to foreclose, and more.
New to Strike Debt?? Don’t walk cold turkey into a bunch of radicals talking about debt! Show up a half hour early—at 2:30 PM—for an informal pre-meeting intro session. If you’d like to attend this pre-get-together please email firstname.lastname@example.org and let us know you’re coming.
Making Debt a Political Issue: The Annals of Strike Debt Bay Area
By Susan Harman
One of the principal slogans of the Occupy movement was, “Banks got bailed out — we got sold out!” Strike Debt New York arose to explicate that slogan. While banks were given a debt jubilee — thanks to us, the tax payers — the millions of underwater homeowners, student debtors, and people going bankrupt from medical bills, not to mention entire municipalities, were left to fend for ourselves.
Debt unites us all. Whether or not we have personal loan agreements or are in danger of foreclosure, we live in cities and towns that have been swindled in municipal bond markets. Strike Debt is one of the many and varied progeny of Occupy Wall Street, and in particular it arose to rethink debt as a systemic, political issue.
Strike Debt Bay Area (SDBA) began in the fall of 2012 after an Occupy Wall Street activist arrived in Oakland from New York City, found the Occupy Oakland General Assembly, and invited people to come together to watch livestream coverage of the Rolling Jubilee – a Strike Debt program that went on to forgive over $15 million dollars of medical debt at pennies on the dollar.
SDBA’s first action was a Debtors’ Assembly, held in the Fruitvale neighborhood of Oakland in February 2013, and attended by over 70 people. Where banks feel no shame about their massive debts, but instead intimidate the government into subsidizing their risks, individual debtors are often overcome with anxiety, worry, humiliation and isolation. They blame themselves for their medical or student debt burdens, not realizing that billions of other Americans are in the same position because the cost of simply living (a roof over our head, an education, medical care) has skyrocketed.
Debtors’ Assemblies are designed to help individuals realize that “You Are Not a Loan”: that debt is a systemic problem. Our first Assembly was devoted to testimony – initially from some of us to break the ice, and then from the audience – about our various forms of debt. Our underlying theme was, “How can we change debt from an issue of individual shame to a platform for collective action?”
An organizing committee met frequently all spring, discussing the use of debt as a mechanism of control, and its impact on the choices people can make about their own lives. After holding another Debtors’ Assembly in San Francisco in May 2013, a series of projects emerged that had to do with debt on all levels, from individual to municipal to federal. These ongoing projects include:
1. Fighting the sale of the Berkeley Post Office. The excuse for selling our post offices is that the U.S. Postal Service is broke, but that’s a myth. The truth is that the USPS was saddled with a formidable and totally unnecessary debt in 2006 by the Republican Congress. They passed a law mandating that the Post Office prepay 75 years of health insurance for its retirees, something no other government agency or private corporation must do.
This appalling debt made the Post Office a perfect example of the disastrous effects of debt on our society; in this case, as a wedge to privatize our commons. Strike Debt Bay Area joined with others already working on legal challenges to the sale, testified at City Council meetings, and finally, in August 2013, set up tents and occupied the steps in front of the historic 1914 building for the whole month. We held seminars, showed movies, engaged and fed the homeless, and made a clear statement to prospective buyers that they will not take our commons without a fight.
More recently, we have expanded our post office campaign to protest at local Staples stores, where some branches have installed mini-post offices on a trial basis. These mini-post offices are staffed by Staples workers at Staples salaries, not the unionized living wages the Post Office pays.
2. Organizing a Politics of Debt Study Group. The group, which got organized last fall, meets every other week to discuss major readings in the politics of debt and monetary theory. They presented at the Occupy San Francisco Forum in March 2014.
3. Initiating Talks for a Public Bank. Strike Debt Bay Area has begun working with associates of San Francisco Supervisor John Avalos to start a public bank. We also assisted in writing a policy paper for the Siegel for Oakland mayoral campaign, providing the rationale for and endorsing a “Public Bank of Oakland.”
4. Fighting for Richmond’s Homeowners We have been very supportive of Richmond’s efforts to use eminent domain to rescue underwater homeowners. Although the city has voted three times to implement a blight-prevention program, Richmond still needs another California city to join them as part of a Joint Powers Authority, in order to bring the program into existence.
SDBA has been trying to find a willing partner for Richmond and to that end our members have testified at Council meetings in Oakland and Berkeley, and are meeting with representatives and community activists in Vallejo, Fairfax and San Francisco. We see eminent domain as one strategy to get the banks to restore peoples’ above-water ownership of their homes.
We are eager to pursue other strategies, such as the broken chains of title and mass action lawsuits based on the recent California court decision Glaski v. Bank of America as other ways to stop foreclosures. Mortgages are the largest category of individual indebtedness in the U.S. and the foreclosure pipeline remains a crime-riddled jackpot for the big banks. SDBA members have written about radical solutions to the mortgage crisis here and here.
5. Re-Publishing the Debt Resisters’ Operations Manual. We organized a well-attended publishing party in March for the new edition of the Debt Resisters’ Operations Manual, produced by our New York counterparts, where we sold or gave away about a hundred copies.
6. Producing Strike Debt Radio Produced as six 10-minute shows airing on Pacifica’s KPFA in Berkeley, Strike Debt Radio consists of “women-on-the-street” conversations, interviews with debt resistors, music, data and analysis, and advertisements for alternatives to indebtedness.
We have explored student debt with Andrew Ross, Annie Mclanahan and Justin Tombolesi; What is Money with Ellen Brown of the Public Banking Institute; and the Federal Reserve with Stephen Zarlenga of the American Monetary Institute.
7. Applying to Vallejo Participatory Budgeting process. In order to start a non-profit check cashing/payday loan business, Strike Debt Bay Area met with the staff of Community Check Cashing located in the Fruitvale neighborhood of Oakland, which may be the only nonprofit check cashing facility in the country. They have a very low default rate because they spend a lot of time counseling their customers about money management. We would like to figure out how to help replicate their model and make it financially sustainable in both Vallejo and Oakland.
8. Presenting talks across the Bay Strike Debt Bay Area has presented at Occupy San Francisco Forum, California Institute of Integral Studies, Acorn Books, Suds Snacks and Socialism, and other venues on the centrality of debt to contemporary forms of capitalism and what Strike Debt plans to do about it.
9. Holding Berkeley seminars Most recently, SDBA spun off a UC Berkeley chapter, which held two seminars with visiting scholar and New York Strike Debt member Andrew Ross, and will hold a Debtors’ Assembly on campus in the near future. Strike Debt advocates a platform for truly public education, which is far more possible than we have been led to imagine. Read about it in “How Far to Free?”
Debt impoverishes the many while profits accrue to the few. Mass indebtedness is a symptom of finance capitalism where our debt payments (for student loans, for mortgages, for credit cards, for municipal bonds) fuel the destructive fire of Wall Street.
But Strike Debt believes that debt also holds the key to our collective liberation. Once we begin to understand debt as a platform for collective action and resistance, we realize that we have power over Wall Street. Imagine a debtors’ union that could both threaten and realize coordinated debt strikes – not only to renegotiate principal amounts or interest rates, but also to demand debt jubilees. The banks got a debt jubilee and if we organize, so can we. We, the millions of debtors, are also too big to fail.
New to Strike Debt?? Don’t walk cold turkey into a bunch of radicals talking about debt! Show up a half hour early—at 2:30 PM—for an informal pre-meeting intro session. If you’d like to attend this pre-meeting get-together please email email@example.com and let us know you’re coming.
Join Strike Debt Bay Area in working on some exciting projects locally and nationally to fight unjust debt.
– The latest on our coalition efforts to Save the Berkeley Post Office and fight the privatization of our commons.
– The latest on our efforts to help Richmond and NGO allies push for principal reduction for Richmond’s homeowners. Read two articles here and here, written by two Strike Debt Bay Area members on the Richmond principal reduction / eminent domain case.
In addition, we are exploring the use of a public bank to help Richmond, CA and other communities escape the thrall of Wall Street.
- A project to bring non-profit, non-usurious payday loan services to Vallejo and Oakland.
– Other projects include efforts to fight against student debt in conjunction with peeps at UC Cal via a Strike Debt UC Berkeley chapter of Strike Debt, a book group with semi-weekly discussions, investigations into the legitimacy of mortgage ownership and therefore the right to foreclose, and more.
Strike Debt Radio, Show #5, airs this Wed. April 2, on KPFA’s “Morning Mix”, 8-9:00AM. "What is Money?"
We explore how money is created, some common misconceptions about money, and we interview public banking advocate Ellen Brown, author of “The Web of Debt” and Green Party candidate for CA State Treasurer.
"JCS is considered a significant player within the private probation universe. Founded in Georgia in 2001 by a group of locals with backgrounds in law enforcement and the finance industry, the company has since expanded its operations to Florida, Mississippi and Alabama. Business has been good. Between 2006 and 2009, JCS more than doubled its revenue, to $13.6 million, according to a profile in Inc. magazine. And while recent revenue statements for the privately held company aren’t available, what is known is that JCS operates in some 480 courts across the country. In larger courts, JCS can net as much as $1 million in probationers’ fees each year, according to an estimate from Human Rights Watch.
To keep business booming, JCS representatives crisscross the South promoting the company as a free and effective “supervision services” program. (“Helping municipal court clerks kick their heels up in joy,” JCS promises in one magazine ad.) And yet, if private probation has seemed like a solution for struggling Southern cities, it has been a disaster for the many poor residents who are increasingly trapped in a criminal justice system that demands money they do not have, then punishes them for failing to pay.”
Laura Wells will speak at the Main Berkeley Post Office on Saturday March 29th at noon. Laura Wells is running for California State Comptroller with the aim of establishing the first Public bank of California.
Students at UC Davis have added their own twist to the schools PR campaign #OneUCDavis: #OneDebt.
Students everywhere are drowning in debt, and, #StudentDebt being non-dischargeable, financiers, investors and even the US Government is profiting off of and exploiting student’s precarious situation. The UC system has taken its guaranteed revenue stream - resting firmly on top of student’s backs - and invested in lucrative private construction deals and other large scale projects. As services and education quality (not to mention ) are defunded in “times of austerity”, the university continues to grow at the expense of its student’s futures. Higher education could rather easily by free and should be, but for now a whole generation of youth with bright dreams and big ideas are being foreclosed on by an enormous debt burden.
This is a systemic problem that requires a scale of collective engagement large enough to match the problem at hand. Remember: You Are Not a Loan!