Santa Cruz County Boycotts Big Banks that do Bad Things

By William Hudson

Santa Cruz Takes a Stand Against Wall Street Banks

Santa Cruz, California—a laid-back surfer community along the iconic Route 1—has become an unlikely leader in the fight against Wall Street misconduct. Unlike its wealth-driven neighbors to the north in Silicon Valley and to the south in Carmel, Santa Cruz has long valued lifestyle, natural beauty, and progressive ideals. Now, its elected officials are using those values to challenge some of the biggest banks in the world.

The Santa Cruz County Board of Supervisors voted to pull county investments from five major institutions—Citicorp, JPMorgan Chase, Barclays, The Royal Bank of Scotland, and UBS AG—after they admitted to manipulating the foreign-currency market. These banks collectively paid a $5.6 billion fine, a penalty critics describe as insignificant compared to the hundreds of billions in profits gained through the scheme.

“Doing business with institutions that are committing federal crimes is not consistent with the obligation that we have to protect public dollars,” said Supervisor Ryan Coonerty, who introduced the measure. He added, “There’s been so much bad behavior and so few consequences.”

While Santa Cruz’s $650 million portfolio is small compared to Wall Street’s reach, county leaders believe collective action can make a difference. If other cities and counties follow suit, the financial impact could force banks to reconsider their practices. Supervisors have already reached out to about 50 “progressive” municipalities nationwide, including several in the San Francisco Bay Area, to join the boycott.

The fraudulent scheme at issue was hatched in online chatrooms where traders openly referred to themselves as “the cartel” and “the mafia.” Though the Department of Justice stopped short of pursuing criminal prosecutions, then-Attorney General Loretta Lynch described the conduct as a “brazen display of collusion” that harmed consumers, investors, pension funds, and even the banks’ own customers.

Advocates say Santa Cruz’s move is more than symbolic. “It’s a bold step by the supervisors to do this,” said Walt McRee, chairman of the Public Banking Institute. “They’re taking a creative and direct response to the criminal practices of the big banks.”

Santa Cruz also has a history of distancing itself from institutions caught in misconduct. In 2011 and 2012, it cut ties with Barclays, JPMorgan Chase, and Bank of America over interest-rate rigging and other deceptive practices. But advocates warn that county officials should also scrutinize the local property recording system, which contains thousands of fabricated mortgage documents filed by banks and servicers skirting recording laws.

The Santa Cruz boycott is already drawing international attention, including inquiries from governments in Australia and Ireland, as well as from Wall Street insiders disillusioned by the culture of deception. County leaders say they will redirect funds toward more responsible financial institutions such as Bank of the West, though observers caution that thorough due diligence is needed to avoid repeating the same mistakes with smaller lenders.

Santa Cruz may be a small coastal community, but its actions point toward a larger grassroots movement. By refusing to place taxpayer funds with institutions that engage in fraud, county officials are sending a clear message: public dollars should not fuel criminal enterprises.

A revolution may be brewing—one county, one city, one community at a time. Break the banks.

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Tags: boycott big banks, break the banks, foreclosure fraud, santa cruz foreclosure
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