Wednesday, December 4th CUNY Students rise up against Citibank and student debt
Citibank provides prepaid cards to students receiving financial aid and/or work-study. What they don't tell you is that the card is riddled with hidden fees. Also, it allows Citibank to use student financial aid as a short term loan for themselves. CUNY gives Citibank a 300 million dollar loan via its Scholar Support Card.
On Wednesday, December 4th, as part of the New Day New York December 5th Day of Action and Week of Action, students are holding an action outside of Citibank to protest a card system that allows wall street to skim off of CUNY students.
More info, from SLAM Herstory Project
“ When the aid checks are deposited students won’t be able to access their money for a couple days. During that time the bank can use that money as it pleases, probably for its own investing. As CUNY student financial aid amounts to some $300 million a year, that’s a lot of money. So in essence, every year, some of the economically poorest students in the nation will be giving Citibank, the world’s second biggest bank, an interest-free, $300 million loan with which it can make some easy profit. In sum, the bank is acting as a carpetbagger.
What is Citibank’s record?
CUNY’s choice of Citibank is disturbing as the bank’s record is characterized by anti-student policies, racism and union-busting. In October 1995, the Campaign for an America that Works awarded Citibank its “Hog of the Month” award for the bank’s lobbying efforts to kill direct student lending. The federal loans permit students loans directly from the government without exorbitant fees or interest. Citibank lobbied against these loans because it wishes to force students to receive loans through commercial banks. That would allow the banks to gouge students with fees.
In 1989, Citibank tightened credit for students seeking to obtain U.S.-guaranteed loans through the bank. According to the Wall Street Journal, Citibank drafted guidelines to deny loans to students at schools whose default rates topped 25%. Wrote the Journal, “[The policy] would potentially hit hundreds of…colleges that cater to low-income students and minorities. Federal surveys have shown that several branches of the City University of New York…have default rates above 25%.” In other words, Citibank created a policy that discriminated against CUNY students.
In 1988, Citibank denied some University of California students credit cards because of the students’ ages and majors. According to the Oakland Tribune, Citibank had a policy of denying cards to humanities majors because of their alleged poor credit histories. “They’ve targeted [their services at] student groups they think will have higher-paying jobs, such as MBA students,” the Tribune quoted a Stanford business professor.
Such discrimination extends to Citibank’s lending practices. A federal report published in October 1997 showed Citibank three times more likely to reject black loan applicants than white. In a May 1996 report, NYC Public Advocate Mark Green showed the bank had closed a slew of branches in low-income neighborhoods, many in New York’s black and Latino communities. Green accused Citibank of “financial segregation”. One Bronx councilwoman accused Citibank of “total insensitivity” to the neighborhood she represents.
CUNY’s involvement with Citibank is akin to assisting a company still operating in apartheid South Africa. Tellingly, Citibank was the last American bank to divest out of South Africa. The bitter ender bank didn’t leave until 1987, years after an anti-apartheid divestiture campaign had begun.
Discrimination also characterizes the bank’s union-busting. In 1994, Citibank hired a new cleaning and maintenance firm. The new employer refused to rehire the janitors, many of them minority, who had previously cleaned Citibank branches. These workers, members of Local 32B-32J, earned $13.10 an hour with generous benefits. Instead, the new firm hired non-union workers for $7 per hour. Citibank supports the arrangement, calling the halved wages “moderately less rich.”The union has accused Citibank of “destroy[ing] the living standards of minority workers” and “pitt[ing] two groups of minority workers against each other.”
MCI is vehemently anti-union. In 1986, MCI fired 450 workers at its Southfield, Michigan sales office despite high profits there and just eight days after employees had notified MCI their intention to organize a union.”
