She has yet to cause a run on any of the money-center banks, but political-pundit-turned-digital-entrepreneur Arianna Huffington has lit up the blogosphere with a campaign targeting customers of the largest financial institutions.
Her Move Your Money Project began last week urging consumers to move their deposits from big banks that have feasted on government aid and been the subject of scorn to presumably more responsible community banks.
"For me, the most interesting thing moving into a new year is to encourage people to move from resignation and frustration to action, which is very empowering," Huffington said in an interview Monday. "As I was out with my children over the weekend, at the coffee shop, at the promenade, I had people literally coming up to me saying, 'I'd been thinking about it, I'd been worried as to whether I should do it, and this gave me the courage to do it.' "
No surprise, community bankers are thrilled.
"Community banks are going crazy over it," said Cam Fine, president and CEO of the Independent Community Bankers of America. "I haven't had one banker email me that had something negative to say about it. They just love it."
But even Fine doesn't expect the campaign will be terribly effective.
"I don't think the Huffington Post article is going to disintermediate the nation's 15 or 20 largest banks from some significant portion of their funding," he said. "I think it will run its course and be another interesting little episode among many during this financial crisis."
By the close of business Monday, the targets — Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. — still seemed to have their funding bases intact.
Still, the campaign has proven popular. It had more fans on Facebook than B of A, Citi and JPMorgan Chase combined.
"The idea is simple: If enough people who have money in one of the big four banks move it into smaller, more local, more traditional community banks, then collectively we, the people, will have taken a big step toward re-rigging the financial system so it becomes again the productive, stable engine for growth it's meant to be," Huffington wrote in a Dec. 29 piece on her Huffington Post Web site with co-author Rob Johnson, who is financial policy director at the Roosevelt Institute. "Consider it a withdrawal tax on the big banks for the negative service they provide by consistently ignoring the public interest."
The campaign's Web site, MoveYourMoney.info, attracted 2.3 million page views and 176,000 unique visitors in its first week. It features a short film equating today's commercial bankers to Jimmy Stewart's George Bailey character in "It's a Wonderful Life" - with the bailed out mega-banks playing the role of the cold-hearted Mr. Potter.
The site also lets visitors look up banks in their zip code with a grade of "B" or better from Institutional Risk Analytics, a research firm that donated the online search widget to the project. Armed with that information, and the realization that Federal Deposit Insurance Corp. protection applies to accounts under $250,000 regardless of the size of the FDIC-insured bank where the accounts reside, customers who are unhappy with the behavior of big banks can vote with their pocketbooks to support smaller institutions that played a comparatively minor role in the buildup to the financial crisis, Huffington said in the interview.
Officials from B of A, Citi and JPMorgan Chase declined to comment on the campaign. Wells spokeswoman Richele Messick acknowledged that consumers are demanding more of their financial institutions, but argued that the firm is up to the challenge.
"We are focused as we always have been on delivering the products, the services and especially the conveniences that contribute to the financial success of our customers, but we certainly know that that means earning their trust," she said, adding that Wells through the third quarter had extended $640 billion of credit since last fall's bailout.
Huffington, herself a former Wells customer, said she has banked for more than a decade now with a firm that was not among the top 19 financial institutions stress-tested by the government last spring. But some of her colleagues on the project are just now cutting ties to the biggest banks and establishing relationships with smaller institutions.
"The point we are making is that these big banks that are perceived to be too-big-to-fail have an unfair advantage," said Huffington, who lives in Los Angeles and declined to publicly name her banking institution out of privacy concerns. "It's really the government picking winners and losers, and a lot of these banks are lobbying to undermine the needed reforms."