Good morning. I am Rupert Ayton. My beloved community message today is about resurrection. But not the joy of spring, or Jesus, or the Buddha. And not the horror of Jefferson Davis’s risen South, even though today is the 158th anniversary of Lee’s surrender to Grant at Appomattox and this past week we saw Jim Crow rising again in Tennessee.
Instead, I’ll examine with you an insidious serpent of institutional oppression that has recently resurrected its ugly self. I am referring to bank failures. And the failure of banking to serve society inclusively, equally, and without discrimination.
This was not always the case.
Our banking system is barely 110 years old. It was fixed in 1933 with the Glass-Steagall act. That distinguished commercial banking, saving and loans, and building and loans. Banking was local. It set fixed terms for deposit and loan products for each. It established deposit insurance to build confidence against bank failures. It created examination and oversight. It kept Wall Street, capitalism’s henchmen, at bay. But that all changed with Jimmy Carter and deregulation in 1980, and subsequent bouts of deregulation that one could argue has led to a series of banking crises over the last 50 years.
Deregulation started because capitalism insinuated itself into banking. It made it all about money, not people. It made it complicated. Capitalism drove a wedge of oppression into banking.
I won’t bore you with the details, but think about this: the story of failed Silicon Valley Bancshares is both comical and criminal. It reads like buffoonery, but don’t let that fool you as we have seen and still see what buffoonery hides: oppression.
As reported in the press, it seems the Silicon Valley Bank CEO, a darling of Wall Street, was so convinced of his genius in discovering how to make money in banking that he believed himself a venture capitalist instead of a banker. He argued against regulation. He ignored regulatory oversight. He ignored his own risk models that forecast disaster. He even cashed in his risk insurance policy. Notice it was a “he.”
And it appears his underlings and board went along with him. As did Wall Street.
We’ve seen this before, and what irks me is that we still let this happen. And we are perpetuating inequitable service in the name of greed. Silicon Valley Bank was providing deposits to the wealthy and making loans to the wealthy. And in doing so creating more wealth for the wealthy. All backed by our tax dollars. Meanwhile, we have banking deserts, and we continue to have discriminatory banking practices. The rich get richer, the poor and oppressed get poorer.
The bottom line for most banking today is that clients have to fit a box. There is not a lot of room in that box for people of color or people living outside of the social norm or below the poverty line. And regulations intended to deal with that problem function like a software programmer who does not understand user needs. The result does not do what we want.
If you asked me for a social institution analogy to banking, I’d say health insurance. Like we need a single payer system for healthcare, I think for banking we need something similar.
I am complicit in this problem, because I used to work in banking and I use one of those banks for the wealthy, even though I am not wealthy. I am now motivated to work solely with a credit union. It is the most equitable option I can find. I am looking at how credit unions in the deep South are working to provide banking services and loans to excluded communities.
Thank you.
