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Occupy Rapid City Pushes City Council to Deposit Locally

By caheidelberger on 2012.01.04

Last updated on 2012.01.06

Since the Occupy movement first started making news in September, I've sympathized with the pundits who argue that the Occupiers have to go beyond public demonstrations, get specific, and get political.

Greg Olson sends news overnight that Occupy Rapid City is doing just that: last night, our local Occupiers got the Rapid City Council to consider doing more of its financial business with local banks:

Members of the Occupy Rapid City group gathered outside city hall this evening. The group had an objective that they hope will help to improve the local economy and stimulate local job growth in the future. The group assembled inside the council chambers after a brief protest gathering on the sidewalk outside. About ten members of the group registered to speak publicly before the council. Each speaker approached the topic from their own unique prospective, but the common theme was to encourage the council members to reconsider the makeup of the officially designated depositories for the city's money. Occupiers want to see the list limited to locally owned banks, local investment companies, and local credit unions.

...The council passed an amended motion to approve the list and create a committee to review the criteria for choosing the institutions on the list. The issue is to be revisited by the council in sixty days [Greg Olson, "Occupy Rapid City Council," sdgopolitics, 2012.01.13].

Getting a committee to report in 60 days isn't the same as getting the council to make a real change in where it deposits local money, but it's a step in the right direction. Kudos, Occupy Rapid City, for drawing the council into a conversation about a useful policy change.

p.s.: Olson notes that KOTA covered the meeting, but didn't mention the role of Occupiers in raising the issue of local banking.

Update 2012.01.06 21:51 MST: Sam Seder gave favorable mention to Occupy Rapid City's political efforts on the Thursday edition of his online radio program, The Majority Report (timestamp 25:45).

Published in South Dakota

caheidelberger

8 Comments

  1. John Hess 2012.01.04

    Are there any local banks anyway? If so, why should they get guaranteed deposits? Everyone wants to twist and pull free market systems, cause they know better.

  2. tonyamert 2012.01.04

    John-

    There are many local banks and credit unions in Rapid City. Blackhills Community Bank and Black Hills Federal Credit Union are examples.

    I believe that the protesters want the money deposited in local banks because they don't resell the mortgages unlike big banks like wellsfargo/BOA/etc. Their belief is that this behavior of large banks lead to the recession. Accordingly, they feel that by depositing in local banks they are making an intelligent choice against the kind financial decisions that lead to the recession.

    This is exactly what the free market should result in. If people think that you are doing something incorrectly your business should suffer. These protesters think that the big banks are doing something incorrectly and accordingly are trying to steer their (all of our) business away.

    I would also posit that this is exactly what we want from the democratic process. A small minority is bringing an issue to the forefront. This has nothing to do with some anti-freemarket ideal being pushed by a small group. This is a small group looking at the market and saying, hey government, this is a better choice.

  3. John Hess 2012.01.04

    I hear ya, except it's not the way things actually are. Most loans from all sorts and sizes of lenders are sold on the secondary market. They get sold to Fannie, Freddie, Ginnie, whoever. I'm told with few exceptions, the industry (including credit unions and small banks) do not retain their loans anymore.

    In my opinion, better for the city to negotiate with banks (operating locally) with whom they make their deposits to ensure high rates and/or types of community investment. To just say some select group should get money without making sure there's the type of positive return desired is ridiculous. Well meaning perhaps, but unsupportable. Without doing so they would be better to just search for the best interest rates which would also benefit the city.

    Actually also kind of interesting, many sales of home loans (after origination) are not even recorded at the court house any more. They are done through MERS (Mortgage Electronic Registration Systems), which is a more efficient way to track the loans as they are bought and sold. Also very much not local. It's just not the way things are right now.

  4. Greg Olson 2012.01.04

    John,

    It doesn't take too much effort to check out the banks and the credit union that are already on Rapid City's list of officially designated depositories. The information found on these South Dakota, Black Hills, and Rapid City institutions' websites does not appear agree with your comment. Further, the existing list of designated institutions has been around for quite some time without any negotiation of terms or interest rates taking place. Check out the archived video of the council meeting and see if there is actually anything in it that is anything other than reasonable discussion.

  6. John Hess 2012.01.05

    It really is more efficient. Without MERS all the bundling and packaging of mortgages would be very difficult to do. Probably would not have been possible. Not saying it's a good thing. Just efficient. In fact it's scary to think of all these ownership transactions happening behind the scenes, rather than at the court house open to the public. But it's so wide spread that it is too big to fail. Some courts have thrown out forecloses because they couldn't prove ownership in the traditional way, but it's the way the mortgage business is being done.

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