WALL STREET – In joining the growing move to “Occupy Wall Street,” Lower East Side People’s FCU is finding it hard to avoid offending at least one powerful ally: giant investment bank Goldman Sachs, the credit union’s sometime patron and partner which is a major target of the protestors.
The community development credit union’s support for the protestors in Wall Street’s Zuccotti Park has prompted the giant investment bank to withdraw its support from the credit union’s 25th anniversary fundraiser next week, where the growing anti-Wall Street protest is slated to be honored. The financial support amounted to $5,000, or one-fourth of the total cost of the event, according to a story first published in the Wall Street Journal.
Goldman said it didn’t want its money and its name supporting the movement which is targeting it and other pillars of the investment banking community.
The conflict highlights one of the dilemmas of entities such as community development credit unions, which have long received financial and other support from big banks in exchange for Community Reinvestment Act credits. Goldman Sachs, in fact, is a partner with Lower East Side People’s FCU on a financial literacy program.
But the $28-million CDCU is in the center of the “Occupy Wall Street” movement that is sweeping across the country, with protestors first opening an account there to deposit funding for their campaign, as well as passing out leaflets urging people to move their deposits from big banks such as Bank of America to local institutions including Lower East Side People’s. Highlighting its support, the credit union’s board decided to make the protest part of its anniversary dinner to help raise $70,000. The decision caused major conflicts on the board, with some directors pointing out the partnership with Goldman.
Still, the credit union decided Occupy Wall Street was a proper target of the annual dinner because it believes the goals of the protest – making it easier for struggling New Yorkers to get loans and open bank accounts – are in line with its main function as a CDCU.
“Their money was welcome, but not at the price of giving up what we believe in,” Pablo DeFilippi, one of the dinner hosts and associate director of member development at the National Federal of Community Development CUs, told the Wall Street Journal. “We lost their $5,000, but we have our principles.”
