The politics of banking
Amalgamated Bank underwent a big change in its 95-year history this summer, becoming the nation’s only union-owned, publicly traded bank. While the New York-based bank has a relatively small geographic reach, it plays an outsized role in national affairs as the default bank for the Democratic Party and labor unions. Keith Mestrich, the bank’s chief executive, spoke to The Associated Press about recent changes at the bank and this year’s election cycle.
Why did Amalgamated go public?
We used to have three owners: the garment workers union and two private equity firms who made an investment in us after the financial crisis. All three wanted to take advantage of that investment. But the more important reason we went public is to access the capital markets, which allows us to grow. You don’t find many banks bigger than $5 billion that aren’t public because you need that access to capital.
How has your job changed now that you’re running a public company?
We need to balance the need to create long-term value for our shareholders and continue to have the fortitude and resilience to be able to live true to our mission-oriented principles as a workerfocused bank.
How has this year’s election season benefited you?
We have become the bank of the Democratic Party, many of its candidates, Super PACs and other organizations. It’s been good business for us. We have roughly $400 million in political deposits right now, which is the height of the season. We’ll see a chunk of that money run out because as a candidate you don’t want to wake up after Election Day, have money left in the bank and have lost. But fundraising has become a permanent fixture so we will see those balances increase relatively rapidly.
Banks increasingly are taking positions on issues —marijuana and gun rights, for example. Amalgamated long had positions on issues, so what’s your take on this industry development?
We take positions on things where we think there’s something that we can say in either how we do business, or economic issues of the day, like the $15 minimum wage. Oftentimes we celebrate the work that our clients do. I don’t think it’s appropriate for the bank necessarily to have a position on something like reproductive rights. But we certainly celebrate the work of our clients, like NARAL and Planned Parenthood and others. Many banks are trying to be the every-person bank, appealing to everybody in a geographic area. Most of our customers come to us, because they have values and a political persuasion that leans one way. I recognize we’re unique in that respect, but that is part of our business model, and it’s been part of why we’ve been successful.