RESOLVED, That this 139th Convention of the Episcopal Diocese of Newark encourage congregations throughout the Episcopal Diocese of Newark to engage in thoughtful conversations on our relationships to economic inequality and economic class more broadly, seeking to recognize economic inequality at individual, local and systemic levels. In addition to these conversations; and, be it further
RESOLVED, That this 139th Convention of the Episcopal Diocese of Newark encourage the Episcopal Diocese of Newark, as an act of Christian witness, to
diveststudy the implications of divesting all moneys from banks and financial institutions implicated in the foreclosure and financial crisis or engaging in predatory lending practices (including, but not limited to: Bank of America, Wells Fargo, Citibank and JP Morgan Chase) and/or in illegal or predatory lending practices; , particularly those targeting minority communities; reporting to the 140th Convention their progress;and, be it further
RESOLVED, That this 139th Convention of the Episcopal Diocese of Newark encourage all diocesan parishes, missions, the Diocesan Investment Trust and other institutions, to an act of Christian witness
by to study divesting all moneys from banks and financial institutions who have engaged in these lending practices; and, be it further
RESOLVED, That this 139th Convention of the Episcopal Diocese of Newark also encourage individuals in these congregations and organizations, as an act of Christian witness, to
engage in study this divestment practice; and, be it further
RESOLVED, That this 139th Convention of the Episcopal Diocese of Newark encourage moving from a framework of scarcity and competition to one of abundance and collaboration by inviting the Episcopal Diocese of Newark, its congregations and individuals
to move to consider moving their moneys to local financial institutions (e.g. banks or credit unions) that engage in just economic practices.
The Resolutions Committee recommends against adoption. The decision to recommend against adoption was reached after the Resolutions Committee consulted with the Diocesan Investment Trust (DIT) for comment on the proposed resolution.
The DIT presented the following comments. There are two areas where this proposed resolution could impact the Diocese of Newark: (1) the general financial operations of the Diocese, and (2) the activities of the Diocesan Investment Trust (DIT).
With respect to the general Diocesan financial operations, the Diocese does not currently bank or hold cash in any of the four named institutions. It is not known, however, if the bank used by the Diocese has correspondent or other dealings with any of those four institutions. Since there are transactions that continually occur between banks (from wire transfers to other activities) it is difficult to believe that any bank can completely avoid interacting with any of the four named institutions (which, according to the Federal Reserve, are the four largest banks in the US).
One small endowment fund does have a bank account with one of the four named institutions.
With respect to the activities of the DIT, its assets of the DIT currently are invested in mutual funds with the TIAA-CREF Trust Company. TIAA-CREF utilizes the services of one or more of the named financial institutions to transact business for non-DIT accounts; in addition, it utilizes the services of one of the named institutions to process the purchases and sales of funds in which the DIT invests. The DIT does not hold cash, so the DIT’s direct involvement with the named institutions is limited to the use by TIAA-CREF to process transactions for the DIT. It is not clear, therefore, if the proposed resolution would apply to the DIT since the DIT does not have direct activity with the named institution.
If it is considered that the resolution does apply to the DIT, the DIT would be in a position that it would most likely have to terminate its relationship with TIAA-CREF. As a practical issue, however, the DIT may not be able to enter into a relationship with another fund manager that (a) does not use any of the named financial institutions to process its financial transactions and (b) which could provide necessary and cost-effective services to the DIT. When the DIT undertook a search for a fund manager several years ago to handle its portfolio, it found that there were very few organizations that were able to provide the services the DIT required. To add a restriction as to which banks the fund manager could use simply to process the DIT transactions may make it impossible for the DIT to manage the portfolio in an efficient and cost-effective way.
The proposed resolution seeks to require that the DIT not utilize the services of institutions “who have engaged” in certain practices. It is one thing to seek to prohibit utilizing financial institutions that are currently engaging in those practices; however, the DIT believes that the named financial institutions have been penalized and have discontinued the practices relating to the “foreclosure and financial crisis.” Requiring the DIT to avoid using the named institutions does not solve anything that has not already been solved by the government’s actions, fines, and penalties.
While the proposed resolution specifies four financial institutions, it also would prohibit the use of other institutions that are not named. Without the proponents of this resolution naming specific financial institutions that are to be avoided, the resolution does not provide enough information or guidance for the DIT or any individual church or church-related organization to take action.
Given the reasons above (the lack of specificity as to which institutions are involved, the inability of most banks to process transactions without ever using the four largest banks in the US, the actions taken by the government to solve the problems noted, and so on), it does not seem prudent to have constraints of this type that could lead to higher costs for the Diocese and the DIT.
Submitted by: The Rev. Geoff Curtiss, All Saints’, Hoboken; The Rev. Miguelina Howell, Church of the Epiphany, Orange; Ms. Laura Russell. All Saints’, Hoboken; The Rev. Manoj Zacharia, St. Paul's and Resurrection, Wood-Ridge
The debate over credit unions versus banking institutions is heating up ever since the financial crisis of 2008. After the bailout consumer attitude towards traditional banks took a nose-dive. As a result people who are disgusted by fees, upset by service and unhappy with their savings yields are invited to consider moving to a credit union. Local credit unions treat customers like they are VIPs. Credit union employees actually remember people's names, and they will even waive fees without a request. Many credit unions offer higher rates on CDs, Savings and Money Markets without fees. They have better interest rates for various accounts often better mortgage rates than other local banks.