The Chicago Teachers Union has started an online petition as part of a boycott against Bank of America over controversial swap deals with the city and Chicago Public Schools.
The MoveOn.org petition, which had over 720 signatures as of Friday morning, states: "I pledge to Boycott Bank of America until they renegotiate toxic swaps that have cost Chicago Public Schools and the City of Chicago more than $1 billion. I also ask that the Illinois Attorney General, Lisa Madigan, begin public hearings to investigate the tremendous financial damage caused by toxic swaps on Chicago and our schools."
CTU plans on delivering the petition to Bank of America's CEO Brian Moynihan as well as Illinois Attorney General Lisa Madigan.
The union provided these comments about the bank deals in an email to supporters with a link to the new online petition:
Banks like Bank of America were active in manipulating the real estate market with slick stock strategies that blew up in all of our faces in 2008. Their irresponsible actions caused a recession and forced the Federal Reserve to bring interests rates down around zero percent. As a result, cities like Chicago lost money on its bet that interest rates would rise, while the banks--which caused the collapse of interest rates--profited.
According to an expose in the Chicago Tribune, Bank of America was one of the underwriters on Chicago Public Schools' auction rate securities (ARS) that cost the district $100 million more than an equivalent fixed-rate bond would have. Despite the risk, and the fact that Bank of America knew the ARS market was headed for a "meltdown," the bank did not warn CPS, which was in violation of the federal fair dealing rule.
How auction-rate bond deals burned Chicago Public Schools (VIDEO)
The City of Chicago recently paid out more than $200 million to terminate these "toxic" deals--roughly the same amount of cuts that Mayor Rahm Emanuel just imposed on schools. Holding Bank of America responsible would restore millions of dollars to our schools at the very moment when every dollar counts. If our school district and elected leaders won't take action to hold the banks accountable, then we will do it ourselves.