Why Are Philly’s Big Banks “Too Big To Trust”?
In recent years, Big Banks in Philadelphia and around the country have marketed complex financial products—known as interest rate swaps—to our schools and our city. These deals were sold to schools and the city as a theoretical way to lower the costs of borrowing. It was a way to take variable rate interest loans and effectively turn them into fixed rate loans.
But after the 2008 economic meltdown—caused, in part, by the Big Banks—interest rates crashed to nearly zero. These low rates, which were enjoyed by the banks after they were bailed out, left our School District and many more on the short end of now-bad contracts.
In an effort to end these bad deals, our school district and city have lost hundreds of millions of dollars. These deals are draining away millions that could otherwise go to maintain essential services, close budget gaps and retain good workers.
The Fight for Philly campaign is partnering with communities, parents, students, and many other organizations to hold banks and corporations accountable. We are asking the very same banks that claim that they are “here to help” to pay back the millions of public dollars that they cost our schools and our children when they steered us into these Wall St. engineered deals.
Our banks may fail to recognize the need to be good corporate citizens in our region. They may refuse to pay back the millions in cancellation fees. They may refuse to re-negotiate current debt deals with our city and schools.
But if this becomes the case, then we the people who have suffered the many cuts to our essential services and our children’s schools as a result of banking greed need will work tirelessly to:
- Organize and encourage individual citizens to leave those banks
- Empower local institutions to leave those banks
- Support and encourage our city and school district to stop doing business with these banks
Our communities have been deeply damaged by the irresponsible greed of our banks. Despite this, these banks were deemed “too big to fail” and were bailed out.
Now, years later and after the stimulus money has dried up, our schools and communities are suffering cuts to services and cuts to our schools. It is unconscionable that these same banks continue to rake in profits on ill-conceived, ill-marketed deals.
We call upon the banks that our city and schools do business with every day to remedy this situation and re-negotiate in good faith. Otherwise, we call upon our elected leaders to lead the way to justice and divest all public dollars from banks which do not prioritize our community.