“Bankers are not the most popular figures in America right now,” says Keith Mestrich, chief executive of Amalgamated Bank. “The industry has lost consumer trust and has done very little to earn it back.” With respect to the banking industry in general, that’s probably an understatement. Earlier this year, a Harris Poll showed that America’s three largest banks — JPMorgan Chase, Bank of America and Citigroup — enjoyed “poor” reputations among the public at large. A fourth, Goldman Sachs, flirted with “very poor,” but, alas, could not make the superlative stick.
But Amalgamated is a different story. It has done — and is doing — quite a bit to demonstrate that Americans can again trust their banking system. Amalgamated Bank is alone among financial institutions in greeting visitors to its Web site with a call to action: “Join us as we fight to raise the minimum wage. Sign the petition.” It’s the same message exhorted by the bank’s ads on the New York City Subway — ads that were recently removed by the transportation authority for being “political.”
Mestrich says, “We believe earning trust starts by committing to paper our corporate principles — like supporting sensible regulation that safeguards consumer confidence, being forceful advocates for creating financial opportunity for everyone, and embracing transparency and corporate governance standards that allow for real accountability.” Coming from a banker, such rhetoric usually deserves a scoff and an eye roll—supporting regulation? Embracing transparency?—but Amalgamated is, and always has been, different.
Whereas Lehman Brothers infamously built its empire partly via American slavery, Amalgamated traces its roots to the early-20th-century schmatta — Yiddish for “rag” — trade of New York City’s Garment District. Founded in the labor movement, the bank has supported progressive causes throughout its history. The Amalgamated Clothing Workers of America (ACWA), led by the indefatigable Sidney Hillman, founded the bank in Manhattan in 1923 as New York City’s first labor bank, and one year later, Amalgamated became the first U.S. bank to offer unsecured personal loans for working families. (Today, the bank’s majority owner remains Workers United, ACWA’s successor union.)
In 1927, the bank financed the Amalgamated Housing Cooperative in the Bronx, America’s first union-supported housing development. Amalgamated has supported labor unions and progressive nonprofits and progressive candidates. Progressive Majority, Demos, the Service Employees International Union, and the American Federation of State, County, and Municipal Employees (AFSCME) bank with Amalgamated, to name a few clients, as do the League of Conservation Voters and the Democratic National Committee. In noting New York City’s need for a union-run bank in April 1923, the Nation in an editorial declared itself a “proud depositor” in the then–newly established Amalgamated.
Amalgamated promulgates “Five Principles of Responsible Banking,” a common-sense program that makes you wonder why we’ve ever been willing to tolerate “irresponsible” banking. Most intriguing of the five principles is the fourth, “Find[ing] Value in Economic Justice.”
“We should not reserve the benefits of banking for the few, while the rest of America incurs its risk,” reads a section of Amalgamated’s values statement. “[B]anks should be forceful advocates for public policy that allows for the creation of financial opportunity up and down the economic ladder.” Too often, though, conservatives are allowed to transform issues of social justice into issues of nickels and dimes, steering focus away from the benefits to the community and toward the cost — however paltry or marginal it might be — to the individual. Any progress that isn’t free, they imply, isn’t progress at all. They propose false dichotomies and espouse nonexistent zero-sum games, telling Americans, for example, that for each and every gain in social justice, there is a corresponding economic indignity that they must inevitably suffer.
Perhaps it’s fitting, then, that a bank called “Amalgamated” recognizes the latent synergy that hibernates beneath progressive change. A recent study from the University of California at Berkeley showed, for example, that in Los Angeles raising the minimum wage to $15.25 per hour by 2019 would have a net positive outcome for the city, despite the marginally higher prices that consumers might face. And as Benjamin Ryan wrote for the Nation, we all benefit, often invisibly, when we take steps to combat the ruinous effects of poverty and income inequality. More people spending more money, it turns out, is a good thing. Sharing America’s wealth benefits everyone, not just the immediate beneficiaries. It’s no great leap to apply the same idea to economic inequality, and it’s no wonder that Amalgamated is the bank making that leap.
While Amalgamated’s historic progressivism and willingness to support and provide banking services for marginalized groups might be — at least in the banking industry — revolutionary, the values that inform that open-mindedness and generosity are not. Fair play and transparency are not 21st-century innovations just now coming out of Harvard Business School, yet too often in the banking business, they receive short shrift. Still, Mestrich hopes that more banks will follow Amalgamated’s lead. “Our hope is that other banks and financial institutions follow suit and share our public focus on creating opportunity for Americans up and down the economic ladder,” he says, laying out a challenge to other banks to put their money where there mission statements are. As Sidney Hillman and the ACWA showed in the 1920s, and as Mestrich insists today, banks can be a source for good and a stimulus for progressive social change; they just need to be reminded.