Demonstrators in Chicago confront Wall Steet bankers

October 28, 12:29 AMMadison Independent ExaminerGregory Patin

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Rally in Chicago outside ABA convention. Source: Progress Illinois on Flickr

Early this week, over 1500 banking executives gathered at the Sheraton hotel in Chicago for what is normally a tranquil, low-key event, the American Bankers Association (ABA) convention. Yesterday, thousands of protesters from across the nation made sure it was different this year.

The demostrations were organized by groups such as the Service Employees International Union (SEIU) Illinois Council, Action Now, National People's Action (NPA), and dozens of other activist organizations aimed at turning public discontent with banking institutions into action. The groups are demanding that "banks end their over-reliance on greed and profits and commit to using their taxpayer bailouts and backstops to help America's economy recover," said a news release from the SEIU.

The march and rally concluded three days of demonstrations around the ABA convention and launched a nationwide campaign to demand big banks and Wall Street stop spending millions in taxpayer dollars to lobby against financial reform.

The protests yesterday morning started outside the Chicago offices of Goldman Sachs. A speaker on a megaphone shouted, "We're here to tell Goldman Sachs, shame on you! Shame on you for helping bring this country to the brink of a depression!" The crowd responded, "Shame on you!" Organizers presented a list of demands for Goldman Sachs in a hand-delivered letter that was dropped off in the lobby, including that the bank stop resisting proposals for a Consumer Finance Protection Agency (CFPA) and that it donate the money set aside for bonuses to mortgage-modification programs. The protesters then marched down the street to the Chicago offices of Wells Fargo, where they also attempted to hand-deliver a similar letter to John Stumpf, the Wells Fargo CEO.

The march ended at the Sheraton outside the ABA convention, where demonstrators carried effigies of bank executives, including John Stumpf, former Bank of America CEO Ken Lewis and JP Morgan CEO Jamie Dimon. Some displayed "Wanted" signs bearing the faces of bank executives that read "Wall Street Robber Banker."  They carried signs with slogans such as "No Bonuses for Big Banks" and chanted sayings like "Bailouts? No thanks! Bust up big banks!"

(Progress Illinois posted a series of You Tube videos from the rally that you can view here.)

Several media outlets, including The Wall Street Journal and Forbes, point out that most of the bankers attending the ABA conference are not responsible for the current financial meltdown, quoting ABA president Edward Yingling in his opening remarks: "You did not make any abusive subprime loans; you did not take big bonuses for products that later blew up." Other media outlets such as the Guardian UK put a different spin on it saying, "delegates from the American Bankers' Association are not accepting the blame for the crisis, despite demonstrations from those who think otherwise."

The fact of the matter is that the ABA's membership represents 95% of the US banking industry's $13.3 trillion in assets. Almost all U.S. banks are members, from industry behemoths such as Wells Fargo and JP Morgan Chase to hundreds of small-town banks with a handful of branches. At the same time as taxpayers are facing foreclosures, unemployment, inflation, higher credit rates and new bank fees, the six "too big to fail" banks that have accepted anywhere from $700 billion to $17.8 trillion in taxpayer bailout funds are conducting business as usual, with executives helping themselves to lavish bonuses.

ABA banks are also using their assets to lobby against any reforms that may prevent another financial crisis. Some key reforms that are advocated by the groups behind the demonstrations are:

• Modernize the Community Reinvestment Act (CRA)
• Break up "too big to fail" banks
• Create a Consumer Financial Protection Agency (CFPA)
• Democratize the Federal Reserve
• Modernize the Home Mortgage Disclosure Act (HMDA)

The most significant reform, perhaps, is creating a CFPA to safeguard against mortgage, credit card and other abuses that contributed to the current crisis. Obama said his plans with this agency would update regulations created in the 1930s to deal with the Great Depression, which have been gutted by deregulation and "overwhelmed by the speed, scope and sophistication of a 21st century global economy."

ABA banks devote staggering amounts of money to block regulatory reforms on Capitol Hill. So far in 2009, the nation's largest commercial banks have spent upwards of $27 million on lobbying expenses, the Center for Responsive Politics reports. That's in addition to the $50 million they spent in 2008 -- the same year the industry collectively cashed a +$700 billion bailout check.

While those goals have more to do with pushing Capitol Hill toward reform, a lot was about venting anger at easy targets: The big banks that took billions in federal bail-out money and are using that money to lobby against reforms, while at the same time readying billions in bonuses for top employees.

The difference, however, between this demonstration and other recent demonstrations was summed up by a student at UW-Madison who attended the rally. "There was a clear agenda here and clear goals, not misdirected anger. There were people here from all walks of life - blue collar, white collar; urban, rural; young, old - it was a true representation of Americans united for a common cause."