An Open Letter to America’s Bankers

To America’s Bankers,

We are writing to ask you to join us. Join us in solidarity to fight back against COVID19 and take care of our communities. Together we are witnessing our economy ground to a halt like never before. People are suffering, and even the very wealthy are losing. We have an opportunity to do something that has rarely been done before in the history of the United States of America: join forces, cross class lines and work together to not only fight COVID19, but build an economy that works for everyone. This can begin by freezing debt owed to you.

We understand the vital role of the financial services industry. Your institutions provide safe places to hold our financial resources and you are built to facilitate the distribution of capital in communities big and small. The bank is arguably one of the most important elements of a community; an institution that helps community members plan for the future, start new businesses, buy homes, and save for their children’s education. Data shows that children with a bank account are more likely to achieve a college education, irrespective to how much money is in that account. The very idea of having a bank account with one of your institutions helps folks begin to prepare for prosperity.

Unfortunately, there are times where you haven’t lived up to your potential. Some of you have taken advantage of your customers by charging high fees for basic services; so much so that account fees (and other non-interest income) now make up around 34% of your industry’s revenue. We’ve seen some of you exploit your relationships with customers to open up credit card accounts without their knowledge, damaging their credit scores. Racism too is still very much embedded into your underwriting procedures and governance structures. The impact of redlining practices still runs rampant through our cities. Some of you have merged with each other to become behemoth financial institutions; powerful agencies that not only move capital across the globe, but also have influence over policies that impact us all. The result is that your institutions are deemed “too big to fail” and are the first to get a bailout if needed. But, our workers, our small businesses, our communities are too important to fail. 

COVID19 is decimating many industries in our cities. All non-essential businesses are shuttered, and hundreds of thousands of workers here in Los Angeles are worried about when their next paycheck will come. Small businesses, many of which do not have enough cash to last 30 days, will not make it. That’s the reality.

Fortunately, lawmakers here in Los Angeles worked quickly to impose an eviction moratorium for both commercial and residential tenants.  This is a crucial first step to protect working people, but we need more.

We need you to freeze all debt owed to you at no cost. By freezing debt in this way you are not only joining us in this fight to survive, you are also improving your chances of getting paid back at all.

We can all agree that we need our economy to bounce back immediately after COVID19 is under control. The reality is that workers and business owners that cannot pay their rent during this time will be saddled with a huge debt to pay once the moratoriums put in place in cities like Los Angeles are lifted. James Bullard from the St. Louis Branch of the Federal Reserve just predicted that unemployment will hit 30%. 

If a third of U.S. workers can’t work, they can’t pay. We must do what we can to relieve the pressure they are feeling from you (the bankers). The same can be said for businesses. You have the power to freeze mortgages on commercial real estate. These freezes can be given on the condition that landlords pass the freeze on to their tenants. I’m sure that our current administration may even help cover any of your losses during this time. Freeze our debt; forgive it where possible, but freeze it today. America’s workers need you.

Fortunately, we are starting to see some of you do this. Ally Bank is allowing their customers to defer mortgage payments for 120 days though interest will continue to accrue (why, Ally?), Bank of America is deferring mortgage payments for its customers, and even Quicken Loans is offering forbearance relief using guidance by Freddie Mac and Fannie Mae. 

I understand that this may be against the grain, but if we all work together for at least a few months, we can do a lot to save our local economies. And if you all do it at the same time, you don’t have to worry about one of your bank counterparts trying to make more than you. 

In the coming days, I hope that more organizations and lawmakers will call on you to join us in supporting our communities during this time. My hope is that our Mayor and City Councilmembers here in Los Angeles formally request that you join us in supporting families, workers, and entrepreneurs. I’m optimistic that cities across our country will ask you to join them in solidarity to support the people that will experience the most harm as a result of this crisis. 

Join us in fighting back against COVID19. Freeze the debt of workers, small businesses, and even landlords who want to help their tenants. We look forward to hearing from you!

Sincerely,

The Team at Inclusive Action