Volume 11 ••• Fall 2012
Union-Based Bank Draws Democrats
By Brody Mullins and Peter Nicholas
August 10, 2012
Working People Who Apply for Home Financing in July and August 2012 Will Be Refunded the Cost of Their Home Appraisal at Closing
WASHINGTON—Some prominent Democratic and progressive organizations are scaling back financial ties with Bank of America Corp. BAC +0.26% and switching accounts to the nation's largest union-owned financial-services firm.
The latest convert is the Democratic National Committee, which is set to announce in the next few days that it is moving some of its banking business to union-owned Amalgamated Bank after years of working with Bank of America, a Democratic Party official said.
People involved in the switch said that the DNC intends to move all its business to Amalgamated but that the process wouldn't be completed until after the election. The party official declined to discuss reasons for the move.
President Barack Obama’s re-election campaign is continuing to use Bank of America for its finances, as it did in his 2008 presidential run. An Obama campaign official said few banks in the country were both interested in the managing the account and able to meet the needs of an operation that takes in and spends large sums of money in quick bursts. The official said the decision to use Bank of America is “nonideological—it’s who can provide the best service.”
Bank of America is based in Charlotte, N.C., and has helped pay for the city to play host to the Democratic National Convention next month.
“We do have money deposited with Bank of America. They have been a loyal community partner for Charlotte historically and continue to be one today as we prepare for this convention,” said Dan Murrey [CQ], executive director of the convention host committee. Mr. Obama plans to deliver his acceptance speech at Bank of America Stadium.
The switch creates tension within the Democratic Party, potentially putting more pressure on the Obama campaign to end its dealings with Bank of America. Mr. Obama’s rhetoric toward the financial sector has been harsh. In 2009 he spoke derisively of “fat cat bankers,” and has long presented himself as the champion of middle-class interests.
Asked about the DNC’s action, a Bank of America spokesman said Friday, “We’ve had a longstanding business relationship with the party and that continues.”
The DNC is the latest Democratic-based organization to sign up with Amalgamated Bank in the year since the Occupy Wall Street movement started the trend by refusing to open accounts with any bank other than Amalgamated.
Since then, several other Democratic and liberal groups have abandoned their traditional Wall Street banks. America Votes, a group that helps progressive candidates run for office, recently switched to Amalgamated from Bank of America.
“Amalgamated is worker-owned, operates according to progressive values [and] provides great service with much lower fees,” said Greg Speed, the executive director of America Votes. “All of that added up to a pretty easy decision for us.”
The Democratic Governors Association said it has opened several new accounts with Amalgamated as a sign of support and fidelity, though its primary accounts remain with Bank of America.
In 2010, the Institute for America’s Future—an arm of the liberal group Campaign for America's Future—began moving its money from Bank of America into Eagle Bank, which is based in the Washington, D.C., area.
Amalgamated Bank is the only labor-owned bank in the country. It has $4.5 billion in assets and serves 650 labor unions.
Until recently, it had never had major political organizations as customers. Bank of America has traditionally been the primary bank for both Democrats and Republicans.
“We’ve had a big flood of money from progressive groups” recently, said Ed Grebow, president of Amalgamated Bank. “Part of the issue is these groups have taken for granted that they have to have one of the big banks. You should bank with a bank that shares your values.”
The Romney campaign banks at Chain Bridge Bank in northern Virginia. The bank’s chairman and founder is Peter Fitzgerald, a former Republican senator from Illinois. As of the end of June, Chain Bridge Bank had total assets of $375 million and deposits of $341 million.
“We have been able to bank a lot of political accounts and advocacy groups in large part because of Peter, but these organizations really need a bank that can provide very good customer service,” said John Brough, Chain Bridge Bank’s chief executive.