Unbearable News: UC Berkeley Now Has an "Official Bank"

Gar Smith
Friday November 06, 2015 - 03:22:00 PM

The corporate colonization of the Berkeley Campus continues apace. On October 27, The Daily Californian announced Amazon's plans to establish a base camp inside the new Student Union building, complete with Amazon shipping lockers and a digital lounge. Now comes word that Bank of the West has staked a claim to 989 square feet of commercial turf inside the Martin Luther King Jr. Student Union.

On October 30, Bank of the West (BoW, a member of the Paris-based BNP Paribas Group) took out a full-page ad in the San Francisco Chronicle to proclaim: "Bank of the West is now the official bank of UC Berkeley—a pioneering relationship between two premiere organizations."


Why did BoW (the state's fifth-largest bank) get the nod over, say, Bank of America? The ad would lead one to believe it was all just a matter of ursine solidarity. Berkeley's mascot is a bear, BoW's logo includes a bear and, as the Chron ad proudly put it: "In the West, We Bears Take Care of Our Own." 

And so, beginning in January 2016, it's official: Oski Bear is bullish on commercialism. 

A report in the Daily Cal explained that this latest corporate intrusion into the halls of Academe was spurred by the University Partnership Program (UPP) as "part of a broader initiative to increase partnerships with private businesses in an attempt to tap new sources of revenue . . . . with the goal of marketing UC Berkeley to potential sponsors as a whole institution." 

According to UCB officials, the search for Cal Berkeley's first "official bank" involved a competitive bidding process. So Oski's brand bank might easily have wound up being the Bank of Shanghai. (Chase and CitiBank were reportedly involved in the bidding to become UC Berkeley's reigning banker.) 

Unfortunately, the new corporate take-over was bad news for CUBS (Credit Union for Berkeley Students, Faculty, and Staff), the bear-friendly, student-operated cooperative savings organization that has been tending to student and faculty needs for decades. On its Website, CUBS explains how a coop differs from a commercial bank: "Credit unions are not-for-profit, meaning that all profits earned go back to its members in the form of lower fees and higher interest on interest-bearing accounts. Organized to serve, democratically controlled credit unions provide their members with a safe place to save and borrow at reasonable rates. Members elect the volunteer board that runs each credit union." 

A staffer at the Cooperative Center Federal Credit Union (which absorbed the campus credit union in 2000) explained that the coop's last on-campus ATM was removed when the Student Union was closed for remodeling. The Coop's CUBS lease was up for renewal but the bidding process put an end to student-run, non-commercial banking on campus. There was just no way the Coop could compete against some of the biggest names in global banking. 

(There is, however, something good to be said for BoW's parent bank. In August 2007, BNP Paribas was the first major financial group to blow the whistle on the risks of sub-prime lending and the company promptly shut down its two sub-prime accounts.) 

BoW will be setting up shop on the first floor of the Student Union as part of a 10-year contract that will ban every other commercial bank from campus grounds. BoW plans to spend S13 million imbedding its infrastructure on the USB landscape and, in return, the bank expects to rake in multiple millions. 

And what does UCB stand to gain? Well, in exchange for its exclusive lock on campus commerce, BoW is expected to offer UCB around $1.7 million per year in financial support. It has been suggested that $240,000 of that sum could flow to student programs with another $100,000 going to the Cal Alumni Association. 

Some might see a conflict of interest here, since it was the ASUC Student Union Board of Directors that voted to accept the BoW's lease agreement on October 28. In fairness, the Student Union only played a companion role in the deal. The UPP was the architect of the agreement: The ASUC was only shown the full contract as "a courtesy" since the sole item it was asked to approve was the lease of space inside the Student Union. Some ASUC members complained they had not been given sufficient time to review to contract prior to voting. 

"I wanted to see the breakdown of the stakeholders," Grad Student Assembly President Jenna Kingkade told the Daily Cal. "Where is the money going? I wanted to make sure the Student Union got a fair deal." According to the Daily Cal, a review of the full agreement failed to reveal specific obligations as to what funding would flow to the ASUC's coffers. 

The contract does require that BoW make annual donations to the Bear Opportunity Endowment, a BoW-run program that generates "financial awards" to be managed by UCB's Financial Aid and Scholarships Office. 

The contract promises that the Cal Athletics sports program will receive some financial drip-down from the deal, but there is a precondition. As the Daily Cal explains, the funding is being offered "in exchange for allowing the bank advertising opportunities, such as placing banners or signs in offices, the Recreational Sports Facility and Memorial Stadium." 

The contract grants BoW "exclusive" rights to flog its "financial services" in Bear territory. BoW will install seven ATMs on campus—one in the Student Union, one in the Hass Business School and other locations to be announced. BoW will control all student checking accounts as well as financial planning. The contract explicitly bans UCB from advertizing any competing services on campus. BoW also promises to host a campus "financial literacy program" and plans to offer "paid internships" (presumably to students interested in careers with BoW). 

Where is this commercialization of the UC collegium likely to end? Hard to tell, but here is a suggestion for the financial wizards at the UPP: 

Sign a deal with the Italian automaker Fiat to design a new luxury vehicle for UC administrators and other Masters of Capital. It would be called the Fiat Luxe.