The group “Occupy Wall Street” recommended today that we all close our Bank accounts and move to smaller banks and credit unions by November 5th 2011.

Yahoo article here, provided by Main St.

Right now 192,451 people have “liked” the group’s Facebook page and support is growing for this movement. I’m not necessarily for or against their cause, but it seems to me that they are the hippies of the 21st century (that’s not an insult). The main difference is that today they have the ability to reach and organize a wide audience much faster than in the 60s using social media. But what will moving your Money accomplish?

Since banks use our money to reinvest and loan to other people it would make sense to “reduce their inventory” of Loanable Dollars. If they have less money to loan, the less money they will make on the inventory they have… right? Not necessarily. If they have less inventory that only means that the loanable dollars they do have is now more valuable, possibly causing interest rates on mortgages, car loans and revolving credit to inflate. This seems a case of supply and demand. If the “Big 3” banks, Bank of America, Chase and Wells Fargo, (who happen to own about 30% of the US market share), have less inventory that means that the cost gets passed along to us… the “99%”.

I’m not saying do it or not, but think about it before you make your decision. Of course if this is a matter of principle you’ll obviously do whatever you think needs to be done (as would I). But it seems the only institutions that will really benefit from this are the smaller banks and credit unions that Occupy Wall Street recommends we turn to… because they will have more money to lend and thus be more profitable and grow larger… but… wait… What problem are we solving again?

Before you go closing your Bank of America, Chase and Wells Fargo accounts and moving the money here’s a few things you should consider first… How many direct deposit, auto-pay, auto-donate, and other streamlined services do you already have set up with these institutions and what real effort will it take to switch? It’s not as easy as taking your money and running… and that’s what Bank of America, Chase and Wells Fargo love!

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