What happens when a group of anarchists starts a bank? The answer is that nothing happens: the bank never opens.
One of the legacies of the Occupy movement is a bunch of groups, all looking to take on the financial system in various different ways. There’s the Alt Banking working group, for instance, which recently released a book; there’s Occupy the SEC, which is still issuing erudite and hard-hitting comment letters, most recently on money-market fund reform; there’s Strike Debt, which runs Rolling Jubilee, an attempt to buy up debt on the cheap, and then retire it.
Rolling Jubilee recently responded to criticism from Yves Smith; they promise a lot more details about what they’ve been up to coming up in mid-November, and explain that as “an all-volunteer project”, their project “takes time”. Still, they’ve done what they said they were going to do: they’ve raised more than $600,000, and retired tens of millions of dollars in debt.
And then there’s the Occupy Money Cooperative, which describes itself as being “a cooperative company that offers low-cost, transparent, high quality financial services to the 99%”. It’s also the one group which has basically achieved nothing to date. It got some high-profile press in the NYT today, complete with an illustration of what a future, hypothetical Occupy Card might look like. (Interestingly, the illustration, just like the one on the cooperative’s website, does not include the all-important Visa logo that would actually allow the card to be used in practice.) The NYT article, in turn, prompted a slightly weird defense of Occupy Money from Hamilton Nolan at Gawker, saying that even though it’s “still more of an idea right now than a reality”, it’s still a good idea in principle.
His argument, I think, misses the point just as much as Colin Moynihan did at the NYT. The card is vaporware; it will never exist, and the best you can realistically hope for, if you donate money to the cause, is that at some unknown point in the future the organizers will give up and find some way of getting you your money back.
To put this in perspective: one of the organizers behind the project, Carne Ross, told me in July that he expected there would be a physical card, in existence, by September 17. That is, he told me in July 2012 that he expected the card to be a reality by September 2012. And yet here we are, a year later, and all he can reveal in September 2013 is a fundraising campaign, with a $900,000 goal. Once that goal is reached, the NYT helpfully tells us, the cards will become available to anybody who wants one. What the NYT doesn’t mention is that right now — even with all of today’s added publicity — the total amount raised is $3,789.17, or about $270 per day. At that rate, Occupy Money will be fully funded somewhere around November 2, 2022.
When Ross first told me about the debit card, 14 months ago, it was already a little behind the time: I immediately took out of my wallet my no-monthly-fee Simple card, and told him that it could do anything his card could do, and was significantly cheaper to boot. Since then, GoBank has launched as well, along with a host of very cheap prepaid debit cards, like Bluebird and Liquid.
Occupy Money says in its FAQ that its card is “more than just a prepaid card since it features additional services. It’s our aim to make the card and its associated charges less expensive than other cards on the market.” But it doesn’t feature an explicit price comparison. And if you look down the list of fees ($0.99 per month, $4.95 to load cash onto the card, $3.74 to deposit a check onto the card at a store, 4% for instant check deposit via your smartphone, $1.95 to withdraw cash from an ATM, $2 to speak to an agent, $0.99 for a balance inquiry, etc) then it’s hard to come away convinced that the cost of this card is really going to end up being lower than the cost of its competitors. As for the “additional services”, there’s no indication of what those might be. I find it hard to believe that they include anything you can’t get from Simple or GoBank.
Ross has ambitious dreams: he’d love to open a nationwide cooperative bank, owned by its members but insured by the FDIC, rather than the NCUA. As Nolan says, Ross’s dreams are noble ones. But starting a bank is hard work — even Simple gave up, in the end, and decided to just be a glossy front end for Bancorp Bank. And while launching a prepaid debit card is a lot easier than launching a bank — after all, the Kardashians did it, how hard can it be — it turns out that even debit cards are pretty hard to launch if you don’t have any startup money and you’re run on a volunteer basis.
The Occupy Card, then, is too little, too late: it’s an idea which might have been welcome two years ago, when Occupy was at its peak, but which at this point looks rather old-fashioned compared to some of the best new products on the market. And of course on top of that it has the biggest weakness of all, which is that it doesn’t actually exist. Timing is everything, and the Occupy protests were very well timed. But at this point, the movement is losing momentum. And the anarchists are all off using bitcoin.