Article: Chase Bank Sucks Money Out of Our Community

[Scott McKeown]

Chase Bank is a wormhole that sucks money from our community
and pumps it to Wall Street where it will no longer circulate in our local economy

Scott McKeown
WaccoBB.net

It’s unfortunate how the CVS/Chase development project has caused some rancorous division to occur within our community and has put a reputable, long-time local family in an uncomfortable position. At the

center of this conflict is the age-old power struggle between private property rights and the interests of the community at large. One can sympathize with the property owners who are just trying to maximize their assets, as well as with other community members against the project who just want the best thing for our community’s future.

From a strict legal process perspective it may be moot at this point to focus on the long-term effects the development will have on our community that are not design related.

Nevertheless, given how the main contention on the pro-CVS/Chase side has been that the project will create positive economic benefit for our community, it’s worth examining the economics more closely. Setting aside the questionable claim that CVS moving from its current larger location to a smaller location and abandoning a major shopping center as the anchor tenant will somehow help our local economy, I’d like to focus on the assertion that a larger Chase Bank built in town will be an economic benefit.

By my quick count (and I may be missing something) there are currently ten banks and two credit unions located in Sebastopol. Four of them are Sonoma County-based institutions (Community First Credit Union, Redwood Credit Union, Exchange Bank, and Sonoma Bank), two are North Bay-based (the two Westamerica Bank locations), three others are Northern California-headquartered but operate internationally (Bank of the West and two Wells Fargo locations), and three are East Coast-based (Citibank, Bank of America, and the Chase Bank in the Lucky store).

Does anyone seriously think that just because another large bank opens up in town it will cause Sebastopol residents to all of a sudden do more banking activity than they would have done with ten banks and credit unions already in town?

What will happen, rather, is that the existing banking activity in town will just be spread around differently, with the result being a dilution of money (and therefore profit) going to our locally based banks. The same thing will happen with jobs since there will be less of a demand for the banks we have now to hire as many tellers and other personnel with less activity.

It’s obvious that Chase only wants to open up a larger bank in town because it expects to make more of a profit than it does now with its Lucky store location only. The Chase business model does not include injecting more money into our community (in the form of taxes, fees, etc) than it will extract as profit.

So where does all the extra profit go?

With locally based banks, there is a much higher percentage of bank shareholders and bank employees and executives living locally who will receive the profit money and churn it back into our local economy. In addition, more worthy local businesses and projects will likely be funded, including the about to be restored Doyle Fund that supports our local Jr. college. This local money “churn” hugely benefits the local economy through an economic principle called the “Local Multiplier Effect”.

In contrast, the local profit money that goes to Chase Bank will permanently leave our community to enrich the portfolios of mostly East Coast and other non-local shareholders, as well as the salaries and bonuses of Wall Street-based bankers. It’s the equivalent of an economic leech attaching itself onto our local economy and sucking out the lifeblood. Over time the amount of wealth draining out of our community in this way rather than circulating locally with the Local Multiplier Effect will eclipse any short-term economic gain achieved through a few temporary construction jobs and some new taxes.

Unfortunately, it may be illegal under current law to try to stop this sort of economic damage from being inflicted on our community using this line of reasoning (which, by the way, should be changed). But one wonders why some well-meaning folks from our community who have little direct personal gain to be achieved through the development project are so actively and energetically trying to make it happen? Perhaps they just don’t realize how siphoning off wealth from our community and funneling it far away, as a larger Chase Bank in town will certainly do, works against and not for our local economic interests.

At the end of the day, there may be other reasons, perhaps legal ones, for why this development project will ultimately move forward in some form. But the claim that it will strengthen our local economy should not be one of them.

Scott McKeown is the founder and a continual core team member of Transition Sebastopol. Scott has been a professional trainer and instructional designer for over fourteen years in both corporate high-tech environments such as Advance Fibre Communications (now Tellabs, Inc.) and also with non-profit organizations such as The Buckminster Fuller Institute. For thirty-five years Scott has been deeply involved in movement building and social action issues. Scott founded several social action-focused organizations as diverse as the Mystic Beat Lounge art collective and the Los Angeles Guardian Angels volunteer safety patrol. Scott has been an event producer for over three decades and has produced hundreds of events including the last five bi-annual conferences of the Institute of Noetic Sciences. From 2003 through 2007 Scott was the Executive Director and chief executive of the Harmony Festival in Santa Rosa, California.

[Shepherd]

Go, Scott, Go! I have passed this on to Sebastopol City Council and Design Review Board members, as well as to many others. This article is must reading. I also sent it to Press Democrat editors, in hopes that they might consider publishing a version of it. Please pass this article on to your friends. My deep appreciation to waccobb.net publisher Barry Chertov for posting this and for illustrating it with such appropriate graphics. Please join us Aug. 7 for the City Council meeting, where they plan to announce their decision.

[Peace Voyager]

Excellent points Scott.

I for one would support your ideas which would improve on Sebastopol's General Plan and zoning ordinances.

Colleen Fernald

Candidate for PEACE!
Sebastopol City Council

Chase Bank is a wormhole that sucks money from our community
and pumps it to Wall Street where it will no longer circulate in our local economy

Scott McKeown
WaccoBB.net

[handy]

Shepherd, Helen, and all the other activists,

Living out in the county and not able to vote in local village/town issues, I've followed the various threads regarding Chase/CVS with some interest, but refrained from comment.

After lengthy observation and conscientious consideration of thus far observed variables, opinions and efforts, I'd like to offer a suggestion.


Yer doin' it wrong...

The effort of of trying to "stop" Chase through council meetings, protests, lawsuits, etc., seems to me like a small tugboat attempting to push against the bow of a Very Large ship. The problem is, the Very Large ship is moving at full speed ahead.

You are soon to become propwash; just more of the spinning froth, wondering what happened.

Arrange your little tugboat to be the trimtab. Attach your efforts to the rudder of the ship, and let it carry on out of town at full speed with minimal disturbance.

Where does the Town of Sebastopol bank? If it's with Chase, there is a huge conflict of interest. Demand that they go local. BEFORE they take any further decisions...

Talk with your vendors, retailers, customers and friends and persuade them to take their business and household banking out of Chase.

The bank is here at Lucky because it sees a market. If it fails to see an available adequate market density, it will lose interest.

How many of you have spent how many hours in council meetings and/or protests?

If that many people spent that many hours persuading friends, family and acquaintances to bail on Chase and do their banking with a more trustworthy and local bank or credit union, you could make a serious dent in their customer base. Sebastopol has ± 8,000 people. How many bank accounts exist in town? 8,000 to 12,000? 5,000? I really have no idea; somebody help me here. The point is, it's a manageable number.

That number of accounts is already split 8 or 9 ways between all of the banks in town, with Chase having some finite number of them. 1,500? 2,000? Again, an unknown but manageable number.

How many people and how many hours would it take to persuade 200 customers to switch from Chase, say, before the next council meeting? And maybe another couple hundred the next month? And maybe another couple hundred the next month?

If enough of you spend your time convincing, persuading, selling the idea, cajoling any and everybody you know to withdraw from Chase, if their local customer base is noticeably smaller every time they have to go to a council meeting, they will begin to question the value of the growth investment.

So take your little tugboat of village conscience/conciousness and become the trimtab. Attach yourselves tenaciously to their rudder, and hang on, and keep up a light pressure, and ride their ass on out of town. If your in Lucky's and you see someone you know dealing with Chase, make it a point to chat them up later.

You're selling the idea that Chase is bad for us. The people you Need to sell are precisely their existing customer base. Only if Chase recognizes that you/we as a community will not give them business, no matter what they do, will they bow out of being here.

Persuasion works. Coercion doesn't.

Anywhoo, just a thought. I'm sure there are whine country statists out here who will gleefully tear it apart, but if anybody sees a glimmer of value or truth in it, I'd love to hear back.

Best regards,

[Shepherd]

Dear ???,
I think that some of the things you outline below would be fine and helpful to do. I hope that you will consider doing them. Rather than take an either/or approach, I think each of us should do what we feel we can do. As for me, I work hard on a farm during this time of year during the day. I do my writing during the early hours of the morning before most people are up and go to the meetings that I can go to. I try not to dismiss and use negative words to describe what other people are doing to stop Chase, which I think we will be able to do. I consider us to be the little engine (or town) that could. I do what I feel I can do best, and I hope you will engage in some of the activities that you suggest below, or we will loose our small town character.
Regards,
Shepherd

Shepherd, Helen, and all the other activists,

Living out in the county and not able to vote in local village/town issues, I've followed the various threads regarding Chase/CVS with some interest, but refrained from comment.

After lengthy observation and conscientious consideration of thus far observed variables, opinions and efforts, I'd like to offer a suggestion.


Yer doin' it wrong...

The effort of of trying to "stop" Chase through council meetings, protests, lawsuits, etc., seems to me like a small tugboat attempting to push against the bow of a Very Large ship. The problem is, the Very Large ship is moving at full speed ahead.

You are soon to become propwash; just more of the spinning froth, wondering what happened.

Arrange your little tugboat to be the trimtab. Attach your efforts to the rudder of the ship, and let it carry on out of town at full speed with minimal disturbance.

Where does the Town of Sebastopol bank? If it's with Chase, there is a huge conflict of interest. Demand that they go local. BEFORE they take any further decisions...

Talk with your vendors, retailers, customers and friends and persuade them to take their business and household banking out of Chase.

The bank is here at Lucky because it sees a market. If it fails to see an available adequate market density, it will lose interest.

How many of you have spent how many hours in council meetings and/or protests?

If that many people spent that many hours persuading friends, family and acquaintances to bail on Chase and do their banking with a more trustworthy and local bank or credit union, you could make a serious dent in their customer base. Sebastopol has ± 8,000 people. How many bank accounts exist in town? 8,000 to 12,000? 5,000? I really have no idea; somebody help me here. The point is, it's a manageable number.

That number of accounts is already split 8 or 9 ways between all of the banks in town, with Chase having some finite number of them. 1,500? 2,000? Again, an unknown but manageable number.

How many people and how many hours would it take to persuade 200 customers to switch from Chase, say, before the next council meeting? And maybe another couple hundred the next month? And maybe another couple hundred the next month?

If enough of you spend your time convincing, persuading, selling the idea, cajoling any and everybody you know to withdraw from Chase, if their local customer base is noticeably smaller every time they have to go to a council meeting, they will begin to question the value of the growth investment.

So take your little tugboat of village conscience/conciousness and become the trimtab. Attach yourselves tenaciously to their rudder, and hang on, and keep up a light pressure, and ride their ass on out of town. If your in Lucky's and you see someone you know dealing with Chase, make it a point to chat them up later.

You're selling the idea that Chase is bad for us. The people you Need to sell are precisely their existing customer base. Only if Chase recognizes that you/we as a community will not give them business, no matter what they do, will they bow out of being here.

Persuasion works. Coercion doesn't.

Anywhoo, just a thought. I'm sure there are whine country statists out here who will gleefully tear it apart, but if anybody sees a glimmer of value or truth in it, I'd love to hear back.

Best regards,

[sandoak]

I love the contrast between propwash and trimtab! What might make your suggestion even more effective would be to manage a list of folks who switch from Chase and present it to the City Council before their next meeting.

Chase supporters believe they're supporting business. Any demonstration that Chase does not support our local businesses is useful. They may receive it with a more open mind if we offer it with full appreciation of their efforts for our town. It's hard to have an open mind when you're on the defensive about your basic character and good intentions.

Again, thank you for suggesting a different strategy. It reminds me of the contrast between rbST and GMOs. When the bovine growth hormone was developed, Clover Stornetta announced that they would not accept milk from any farmer using it. This easy and completely effective measure kept rbST out of the county's largest milk supply. The GMO free campaign took who knows how many hours and how much money and failed. After that sad election I wondered what the effect might have been to divert that time and money to developing relationships with individual farmers, sharing all we know about GMOs as friends rather than adversaries. Clover was a trimtab; GMO Free was propwash.

Your suggestion may or may not be the effective solution, but it's worth a try. And it's an excellent reminder to look for the simple leverage point where our efforts actually can change the outcome. Working hard for a cause gives self-satisfaction, but for collective good, the results count.

Shepherd, Helen, and all the other activists,
...
Yer doin' it wrong...

[handy]

Dear ???,

Bruce Ward. We've met at Charles and Georgia's house, and a couple of High St. parties.

I think that some of the things you outline below would be fine and helpful to do. I hope that you will consider doing them.

I already do. I could use a little help.

Rather than take an either/or approach, I think each of us should do what we feel we can do. As for me, I work hard on a farm during this time of year during the day. I do my writing during the early hours of the morning before most people are up and go to the meetings that I can go to.

Agreed. Understood. Cool.

I try not to dismiss and use negative words to describe what other people are doing to stop Chase, which I think we will be able to do.

I was not being dismissive. I was attempting to point out a cybernetic mechanism. You're doing it Wrong. You may have done all the math right out to 6 decimal places, but you got the sign wrong. I, too, see Chase as stoppable, but I perceive in these threads a high degree of frustration among those who are most active.
The degree of frustration and anger expressed should be a clue that the way you're doing it isn't working as well as you think it should. It seems a tremendous amount of energy is being expended, with little to show for it. Good luck with that.

I consider us to be the little engine (or town) that could.

Hmm, to me that implies being stuck on rails with no other option. I'll stick with the little tugboat/trimtab image, knowing that just a little steady pressure on the side of the rudder can change the course of an unstoppable ship.

I do what I feel I can do best, and I hope you will engage in some of the activities that you suggest below, or we will loose our small town character.

Yes, well, carry on. As I said, I do.

I would submit that the small town character is on its way to being lost, when the community begins to depend on a council of elected officials with unknown agendas to solve such problems. In a small town, people self-organize at the levels of friends and family, neighborhoods, business acquaintances, etc. to dissolve the problem by designing it out of the system. A somewhat spontaneous education and boycott by their ex-customer base can convince the bank that there's nothing here for them. (It is a Small town; they really don't have That Many customers.) It's do-able. Once you let it get to council, it gets harder.

Best regards, and thank you for your considered response.

[handy]

I love the contrast between propwash and trimtab! What might make your suggestion even more effective would be to manage a list of folks who switch from Chase and present it to the City Council before their next meeting.

YES!!! Excellent! Are you on for it?

Chase supporters believe they're supporting business. Any demonstration that Chase does not support our local businesses is useful. They may receive it with a more open mind if we offer it with full appreciation of their efforts for our town. It's hard to have an open mind when you're on the defensive about your basic character and good intentions.

Yes. Sometimes the bully needs to be escorted to the edge of town and be persuaded that it is not in their best interest to return.

Again, thank you for suggesting a different strategy. It reminds me of the contrast between rbST and GMOs. When the bovine growth hormone was developed, Clover Stornetta announced that they would not accept milk from any farmer using it. This easy and completely effective measure kept rbST out of the county's largest milk supply. The GMO free campaign took who knows how many hours and how much money and failed. After that sad election I wondered what the effect might have been to divert that time and money to developing relationships with individual farmers, sharing all we know about GMOs as friends rather than adversaries. Clover was a trimtab; GMO Free was propwash.

Precisely.

Your suggestion may or may not be the effective solution, but it's worth a try. And it's an excellent reminder to look for the simple leverage point where our efforts actually can change the outcome. Working hard for a cause gives self-satisfaction, but for collective good, the results count.

By Mystery, I think she's got it!

[cleanair]

On July 25 the Occupy Petaluma General Assembly voted unanimously to approve the following statement and proposal:

Occupy Petaluma supports Occupy Sebastopol in their struggle against Chase Bank and CVS. If said corporations proceed with a lawsuit against the city of Sebastopol, Occupy Petaluma will

a) develop plans to focus on encouraging customers of Chase Bank in Petaluma to move their accounts, mortgages and automobile loans to local banks and credit unions and

b) begin to encourage Petaluman's to shop at locally owned businesses instead of CVS.

Posted by Amy Hanks, Occupy Petaluma

[Chris Dec]

It is not as simple as discouraging people from banking with Chase. I have NEVER opened an account with Chase, preferring to use our local credit union. However, I came here over 20 years ago and secured a mortgage with Washinton Mutual. One day, overnight, it seems, I now had a mortgage with Chase, who purchased the loan from WAMU. Many prior WAMU people who now had loans with Chase found they were not able to refinance and move the loan to another institution (it got a lot harder to qualify, especially for those who lost income due to the economic downfall), and thus, monthly, they, and I along with them, wrote our checks to Chase and continue to pay at Chase banks. I would love to hear from these home owners and get their thoughts on ways to fight the giant.

S...
Talk with your vendors, retailers, customers and friends and persuade them to take their business and household banking out of Chase.
...

[Shepherd]

Good points. Chase is everywhere. I also had an account with Washington Mutual. They failed, which disproves the theory "too big to fail." They were huge; they failed. I think that some of the Big Banks, most of which we have in our small town--Wells Fargo, Bank of America, Chase, Citigroup--are more likely to fail than the local and regional banks, or the credit unions. So it makes sense to close accounts at the big guys, but we do need a more comprehensive strategy, as indicated in this last email.
Shepherd

It is not as simple as discouraging people from banking with Chase. I have NEVER opened an account with Chase, preferring to use our local credit union. However, I came here over 20 years ago and secured a mortgage with Washinton Mutual. One day, overnight, it seems, I now had a mortgage with Chase, who purchased the loan from WAMU. Many prior WAMU people who now had loans with Chase found they were not able to refinance and move the loan to another institution (it got a lot harder to qualify, especially for those who lost income due to the economic downfall), and thus, monthly, they, and I along with them, wrote our checks to Chase and continue to pay at Chase banks. I would love to hear from these home owners and get their thoughts on ways to fight the giant.

[Helen Shane]

Dear Winks et al:

Our mortgage was highjacked by Chase in the same manner, but we managed to get a new one using Exchange Bank. I suggest you now try either Exchange or Community to see if they will take you on.

If others who had been turned down when applying for a refi with one of the locals, try them now And make the point of why you wish to escape Chase. The climate has changed, and locals may be eager to accept new loans. Helen Shane

[handy]

Winks et al,

We had the same thing happen with the WaMu -> Chase mortgage switch, but managed to refi with Redwood Credit Union. They gave us a better rate, too.

Best regards,

[Scott McKeown]

Bruce (or "handy"),

Since you seem to be replying to my original article (Chase Bank Sucks Money Out of Our Community) I feel I need to point out something here. First of all, you make some good points and I agree with much of how you suggest people can take effective action (although I agree with Shepherd that it's not either/or). Nevertheless, that wasn't the point of my article, nor did I propose taking any particular type of action. My article was simply countering the assertion that has been strongly promoted during this debate which is that the presence of a larger Chase Bank in town is good for our local economy. My point was that such an argument is simply incorrect and thus shouldn't be used as a reason for why we should want to have this proposed project in our town. The issue of how to respond to the possible presence of a larger Chase Bank is a very different (and worthy) discussion, but not one that I addressed in my article.

Scott

Yer doin' it wrong...

The effort of of trying to "stop" Chase through council meetings, protests, lawsuits, etc., seems to me like a small tugboat attempting to push against the bow of a Very Large ship. The problem is, the Very Large ship is moving at full speed ahead.

[handy]

Yah. As I said, I've been following the discussion in its different but related threads without comment. Your article triggered my response to the general feel of the conversation as I perceived it. Nothing personal, and no offense intended. While I agree with Shepherd and others that a presence at the meetings may be helpful, I still hold that attempting to "stop" them when they see an obvious market is not as effective as demonstrating to them that that market does not exist.

Best regards,

Bruce (or "handy"),

Since you seem to be replying to my original article (Chase Bank Sucks Money Out of Our Community) I feel I need to point out something here. First of all, you make some good points and I agree with much of how you suggest people can take effective action (although I agree with Shepherd that it's not either/or). Nevertheless, that wasn't the point of my article, nor did I propose taking any particular type of action. My article was simply countering the assertion that has been strongly promoted during this debate which is that the presence of a larger Chase Bank in town is good for our local economy. My point was that such an argument is simply incorrect and thus shouldn't be used as a reason for why we should want to have this proposed project in our town. The issue of how to respond to the possible presence of a larger Chase Bank is a very different (and worthy) discussion, but not one that I addressed in my article.

Scott

[Fagbemijo]

thank you for posting this article.