The Amalgamated Bank: An Alternative to Banking with Too Big to Fail

Progressive organizations in New York City and Washington, D.C. rail a good amount against big banks. But not enough of those organizations have cut themselves off from those "too-big-to-fail" institutions to join, say, the Amalgamated Bank (AB), a bank which does not have a history of scandals and scams that banks like Bank of America, Wells Fargo, and JPMorgan Chase do.

Despite a history riddled with illegal behavior, big banks have enjoyed an unwavering base of clients, along with close friends and former employees in the government, that allow them to break the law, receive petty penalties through ineffective plea deals, and then continue to amass wealth.

Eric Holder admitted earlier this year that some of these banks have become too big to prosecute. That kind of security — the kind where the Attorney General of the United States says publicly that you are immune from the law — has bestowed these banks with an informal insurance policy, a policy that Bloomberg estimates amounts to $83 billion a year.

AB, which Demos does its banking with, is a labor bank that was founded 90 years ago by the Amalgamated Clothing Workers of America. It is not obsessed with growth as much as it is with doing business with unionized companies and buying products that are made in the U.S. Last week it circulated letters among shareholders in many retail companies, asking them to pay more attention to the way factory workers are treated abroad, like in Bangladesh, which it put up on its Facebook page.

Why, then, are so many progressive organization reluctant to do their banking with AB? Keith Mestrich, director of AB’s D.C. Banking Region, says that perhaps its because AB is still “largely unknown,” but that when he meets with potential clients the bank “is not that hard a sell."

“Practically,” he says, “there’s no hindrance.” The D.C. bank has more than $3.5 billion in deposits, nearly doubling its deposit base over the last twelve months. People perhaps also think that banking with a small bank would add complications, but AB, he says, has virtually “no limit in what it can take on.”

The bank, for example, has access to 50,000 ATMs across the country through its Allpoint ATM Network. Chase Bank, by contrast, has about 16,000. The bank has also recently incorporated a cell phone app that allows its customers to take a photo of a check and deposit it by sending it to AB.

Oh, and AB offers great, low-fee retirement account plans. 

The switch from too-big-to-fail to AB labor bank is contingent, it seems, on awareness of its existence. Accountants at progressive organizations, who might not have the same ideological pull to the organization as their colleagues, perhaps also need to be pushed to consider banking as something that can belong to practicality as well as ethics, neither of which AB lacks.   

Comments