Students at Washington University moved their money out of Bank of America and into St. Louis Community Credit Union and then took this picture of their action.
Students at other campuses around the country took action on Thursday and Friday as well. Events included teach-ins, credit union visits to campus, moving money to credit unions and other actions designed to showcase the problems with the banks and the value of investing and banking locally.
I have dreamed on this mountain
Since first I was my mother’s daughter
And you can’t just take my dreams away – not with me watching.
You may drive a big machine
But I was born a great big woman
And you can’t just take my dreams away – not with me fighting!
–Holly Near, Mountain Song
Mountaintop removal (MTR) is an incredibly destructive process that clearcuts forests, decimates mountains, and ruins ecosystems. Communities around MTR sites have experienced severe health consequences from the processes’ waste materials – toxic metals and chemicals that coal companies dump into surrounding streambeds. People in these areas experience high flood risks, have lost access to clean and safe drinking water, and have astonishingly high rates of lung cancer, chronic heart, lung, and kidney diseases, and even death. For more information on how companies extract coal from thin seams in the mountains, and how MTR destroys communities and ecosystems, check out Mountain Justice’s explanation of the process.
There’s no question that mountaintop removal is bad for the environment, contributing 25-30% of greenhouse gas emissions each year despite providing only 7% of the United States’ coal. Surface mining has leveled 7% of all Appalachian forests since 1992. Proponents of mountaintop removal will argue that it creates jobs and generates revenue for low-income communities. This claim is true, as investigated in a 2009 report by West Virginia University. The researchers found that the coal industry generates $8 billion per year for Appalachia. However, the estimated cost of deaths attributed to MTR mining totals $42 billion per year, which outweighs the economic benefit five times over. And this is only the cost of deaths, not accounting for cancers and other diseases caused by the process.
The Role of the US Government in MTR
President Obama’s Environmental Protection Agency has the power to end this destructive process but refuses to take a tough stand against mountaintop removal, preferring to try to make the process more environmentally friendly. On April 1, the EPA announced it would strengthen environmental permitting requirements for MTR, clarify how the agency uses the Clean Water Act to reduce water pollution and the resultant human health impacts, and increase transparency in the process of granting mining permits. This is a step in the right direction, but the EPA’s focus on making surface mining safer is problematic in its impossibility. The MTR process inherently violates the Clean Water Act and will continue to be devastating to people and communities even if some aspects of it are changed. The Obama Administration must start caring about Appalachian communities more than corporate campaign donations. This priority shift would surely motivate the EPA to bring an end to the practice of mountaintop removal altogether.
The Corporate Offenders Who Engage in MTR
Massey Energy is the largest producer of coal in Appalachia, having extracted more than 21 million tons from mountains in 2008. They violated the Clean Water Act over 4,500 times (environmental activists estimate closer to 12,000) between 2000 and 2006 by dumping toxic sediment from their 12 surface mines into rivers. The EPA filed suit against Massey and they were ultimately fined $20 million. This case calls attention to the process of mountaintop removal and how its impossible not to violate provisions of the Clean Water Act as surface mining is currently practiced.
Peabody Coal is the world’s largest coal mining company, operating in Arizona, Colorado, Illinois, Indiana, New Mexico, Tennessee and Wyoming. For four decades the US Government has assisted Peabody in attempts to force Navajo families off their ancestral homelands on Big Mountain and the surrounding communities around Black Mesa in Arizona. The communities continue to resist the forced relocation and construction of the Kayenta Mine.
Arch Coal is the second largest supplier of coal in the US and owner of the controversial Spruce Mine, the largest permitted site yet for MTR, in West Virginia. The mine was originally proposed in 1998 as a 3,100 acre expansion of another site that would have buried 10 miles of streams. Arch’s revised proposal from 2007 scaled the project back to encompassing 2,300 acres and 7 miles of streams. The company did obtain a permit from the US Army Corps of Engineers three years ago, which environmental groups have been fighting since. The EPA is considering shutting down the entire mine for “unacceptable adverse impact,” which it has the power to do under the Clean Water Act but has only done 12 times since 1970 and never when the mine has had a permit. In response, Arch Coal is suing the EPA .
Alpha Natural Resources recently merged with US mining company Foundation Coal to become the third-largest coal producer in the US. They now operate 40 surface mines and 14 coal preparation plants in Colorado, Kentucky, Pennsylvania, Virginia, West Virginia, and Wyoming.
The Banks that Finance Coal Companies & Make MTR Possible
Citibank has lent billions to companies seeking to build new coal-fired power plants and companies that engage in mountaintop removal, such as Massey Energy, Foundation Coal, and Alpha Natural Resources. They recently released a policy for environmental due diligence regarding MTR. Other banks have less extensive ties, such as Wells Fargo who recently stopped investing in Massey Energy.
Bank of America used to be the biggest bank funder of mountaintop removal, helping finance $6 billion for Peabody Coal and $175 million for Massey Energy in 2006. They single-handedly invested $835 million in Foundation Coal in 2006, $700 million in Arch Coal over five years starting in 2006, and over $500 million in Alpha Natural Resources in 2005. Bank of America has since changed their coal policy to “phase out financing of companies whose predominant method of extracting coal is through mountain top removal.” Their use of “predominant” means their policy only applies to companies that engage in surface mine extraction as at least 50% of their overall operations. It has led them to decline deals with an estimated three companies so far, information about which has not been publicly released by the bank. Many claim that Bank of America has stopped financing MTR, which is false. They still falsely believe that the process “can be conducted in a way that minimizes environmental impacts.”
JP Morgan Chase has recently become the largest financier of mountaintop removal. Over the past 17 years they have helped underwrite nearly 20 bond or loan deals worth a combined $8.5 trillion. In 2009 they invested $600 million in Arch Coal, which mined 4.7 million tons of coal from mountaintops that year. In 2008 they acted as the lead manager on a $690 million bond offering to Massey Energy. They are the only mega bank that has not scaled down its investment in MTR in the past few years.
None of these banks have changed their policies willingly. Every victory for mountain communities and ecosystems represents years of struggle by social justice, environmental, and community groups. Shareholder resolutions have been a successful tactic to change coal companies’ policies. The Shareholder Advocacy Committee at Loyola University in Chicago filed a resolution with JP Morgan Chase after students traveled to Appalachia and witnessed the devastation of mountaintop removal firsthand. The resolution asks the bank to publicly report on the impact of MTR mining by clients and the financial impact on the bank if it were to ban MTR financing. Boston Common Asset Management has filed another resolution that demands that Chase adhere to their signature on the 2008 Carbon Principles Agreement, which would improve environmental impact disclosure and ultimately shift more funding into sustainable energy projects. If your school is invested in JP Morgan Chase you could get them to file a resolution to increase public pressure on the company. If you’d like to find out if you are invested, or for more information on filing a resolution, REC can help! Email us at info@endowmentethics.org. If you’re not part of an institution, think about where you keep your money and how you might be supporting MTR through your bank account. If you have an account with JP Morgan Chase, or another of the big banks who finance MTR, consider moving your money to a local credit union or community development bank and tell your old bank you switched because of their investments in mountaintop removal.
In addition to utilizing shareholder resolutions, justice groups have put pressure on JP Morgan Chase and other banks that invest in MTR through protests and direct actions. Coal River Mountain Watch is a grassroots Appalachian group that works to end MTR and rebuild sustainable communities, the Rainforest Action Network is running a campaign against Chase, the Sierra Club is running a Beyond Coal campaign, and Mountain Justice brings young activists to Appalachia during the spring and summer to engage in direct actions such as sit-ins in the West Virginia Governor’s office and pickets at Massey Energy headquarters. Recently the Church of Life After Shopping dumped toxic dirt from MTR sites in West Virginia outside JP Morgan Chase’s New York headquarters and other branches throughout the city. You could plan a similar action against Chase (or another financier) in your community by handing our fliers to customers, holding a sit-in inside a branch, or organizing a speaker or a rally to educate those around you about the devastation caused by mountaintop removal.
Right before New Years the Huffington Post ran an article, "Move Your Money: A New Year’s Resolution," that encouraged people to move their money from one of the big six national banks into small, local banks. Since then the initiative has launched into full swing, with its own website and a bustling facebook page , garnering it extensive media coverage in both the mainstream press and the netroots.
In general I support the idea of this campaign, and if you’re still looking to make a slightly late New Year’s resolution, you should hop on the bandwagon. Just because you didn’t break up with Bank of America last year, doesn’t mean you can’t do it this year. And be sure to provide yourself with the proper scaffolding for making any serious resolution come to fruition.
My one issue with the campaign is that that it specifically focuses on local banks and largely ignores credit unions. At first the MYM campaign didn’t mention credit unions at all until a large number of people (myself included) wrote to them pointing out that credit unions are yet another viable option with their own unique benefits over both the big banks and their smaller, local counterparts. But even on the website, MYM still somewhat dissuades people from choosing credit unions over local banks:
Not all community banks are risk free. Some of them got involved in the same risky behavior that took down some of the biggest banks.
We suggest two options for looking into the small and community banks in your area:
OPTION ONE :
Thanks to the volunteer services of a group called Institutional Risk Analytics (IRA), you can get a listing of the most sound community banks near you. IRA lists only banks that, according to its rating system, which is based on government data, get a grade of “B” or better.
Credit Unions: Many folks have written us suggesting that people should examine credit unions. Like the FDIC for banks and thrifts, the National Credit Union Administration insures the deposits of credit unions and is a good resource for financial data on specific institutions. Credit unions do not disclose financial data in the same way as FDIC-insured banks. As a result, credit unions are not presently included in the IRA ratings database, which covers over 8,000 federally insured banks and thrifts. IRA is developing a method to rate credit unions in a way that is comparable to the IRA bank stress ratings. We’ll be updating users of “Move Your Money” on this issue early in 2010.
The implication of this write-up on credit unions is that because credit unions don’t disclose their financial data in the same way as banks it is therefore impossible to tell whether or not credit unions engage in the kind of risky behavior that we all want our financial institutions to steer clear of. Unfortunately, this misses the fundamental difference between credit unions and banks (both the large ones and the community ones). Unlike at a bank, a depositor at a credit union is an owner of the credit union and most credit unions subscribe to the "one member, one vote" model. That means that the credit union is legally responsible to you and not to its external shareholders like any bank is; at a credit union you are in effect the shareholder. This might even mean that there could be a bit of democracy in our economy (imagine that!).
The larger point here is that while moving from a behemoth oligopolistic financial institution to a small bank is definitely a step in the right direction, it doesn’t solve the core problem. The issue is that people do not have any say or control over what happens with their finances once they deposit them somewhere for safe keeping. While a local bank may be less likely to indulge in risky or fraudulent behavior than a big bank, nothing is actually stopping them from doing so. You’re essentially relying on the benevolence and good will of your local bank manager to not take advantage of you. Moving your money to a local bank doesn’t create deep structural change, only cosmetic change. Only through democratic control of the economy can we foster financial stability that benefits everyone, not just the elites.
Let’s see if the HuffPo crowd catches on to the difference.
