Bank of America (BOA) serves as a destabilizing force in Chicago’s blighted communities, according to approximately 50 protesters who took their message to a downtown branch on Tuesday.
Organized by the Grassroots Collaborative on the eve of Bank of America’s shareholder meeting in North Carolina, demonstrators rallied against policies that, according to protesters, has led to Chicago school closures and community devastation.
“We have schools that are closing, homes that are abandoned, and neighborhoods falling apart; this is a time when we need our neighborhoods to be built up and not destroyed,” said Amisha Patel, executive director of the Grassroots Collaborative. “It’s time for Bank of America to do everything they can to strengthen our communities.”
Patel said Bank of America should renegotiate “toxic” interest-rate swap deals that reportedly cost the city of Chicago $74.2 million each year.
Loans negotiated during the Great Recession have locked local government and taxpayer-backed organizations, like the Chicago Public Schools (CPS), into interest rates of 3 percent to 6 percent. If the interest rate goes up, banks cover the losses and return money back to the public organization by “swapping” a certain percentage back under interest-rate swap deals.
Ten interest-rate swaps from Bank of America take more than $35 million from CPS annually, according to the Chicago Teachers Union (CTU). Bank representatives told CTU in July 2011 that they were not committing to renegotiating the loans, although they were open to talking to their customers, but not necessarily CTU, about any concerns.
"We provided an explanation of general types of SWAPs and provisions and how we act as an intermediary," Bank of America spokeswoman Diane Wagner told Progress Illinois in 2011. "We recommend that the teachers discuss the actions related to the specific SWAP and their concerns directly with the Chicago Board of Education," adding that BOA had given $1 million in support to CPS students via donations to youth organizations.
“It is Bank of America’s responsibility to be a good corporate citizen and do everything they can to strengthen neighborhoods and not just deplete them while the bank gets wealthier and wealthier,” Patel said.
Here’s more from Patel and Tuesday’s protest:
Citing a $1 billion deficit and a “utilization crisis” of nearly 140 half-empty schools, CPS officials have proposed 54 school closures, 11 consolidations and six school turnarounds across the district, affecting approximately 30,000 students.
But according to Beverly Catherine, a participant in the protest, CPS’ deal with Bank of America is being paid for on the backs of students who, she says, are simply trying to get an education.
Her niece’s school on Chicago’s South Side, Garrett Morgan Elementary School, is included on the district’s proposed list of school closures.
“How can we tell our vulnerable students, in our most under-resourced communities, that they are the ones that have to sacrifice, while Bank of America and other banks are making millions of dollars in profits every year off our schools,” Catherine asked.
Catherine’s niece, Zola, 14, has a learning disability and an individualized education program (IEP). Catherine said being forced to relocate schools would take Zola out of her comfort zone and cause her to regress.
“She has made so much progress at this school, why would they take that away from her,” she asked.
Catherine was one of four Grassroots Collaborative representatives to meet with bank executives and request a meeting. Patrick O'Meara, senior vice president of corporate security at Bank of America, agreed to set up an appointment with the organization and discuss interest-rate swap deals by the end of next week.
Vernita McClinton, a Chicago resident on the verge of losing her home to foreclosure, joined Catherine to address bank representatives and request a meeting.
“Bank of America has been no friend to residential mortgage consumers in the Chicagoland area,” McClinton said.
She said her family applied for a loan modification in 2008, and after repeated correspondence with the bank, her home was foreclosed on and “mistakenly” assigned a sale date in 2012.
It was only after the Chicago Anti-Eviction Campaign stepped in with an attorney that McClinton was able to stay in her home, but she added she's not out of the woods just yet.
“It is the tenants in blighted neighborhoods who pay the price of this bank’s greed,” she said.
“Schools and communities are suffering because of Bank of America’s policies.”