When we first reported on interest-rate swap deals in May, the advocacy
group National People's Action told Progress Illinois that it takes a
huge amount of pressure for big banks to renegotiate rates.
And the Chicago Teacher’s Union is apparently taking that advice to heart. The union is again ramping up their continuous pressure on Bank of America and other big banks to re-negotiate interest-rate swaps with the Chicago Public Schools system. The union is hosting a march and rally Wednesday evening with 200 of its members after a cordial, but not fruitful, meeting on Tuesday with bank officials.
CTU officials, including Financial Secretary Kristine Mayle met with Bank of America Senior Vice President Patricia Holden and Illinois Market Development Manager Jennifer Streder on Tuesday. The union got a meeting after half a dozen visits to the banking giant on the South, West and North sides over the span of a month and a half. CTU spokeswoman Liz Brown tells Progress Illinois that the bank reps said they were always open to meet with their customers -- in this case, CPS, and not the CTU specifically. Bank of America reps also said they are not committing to renegotiating the 10 interest-rate swaps that reportedly takes $35 million a year from the school system, according to a CTU release.
The CTU is alleging that the bank “shirked its responsibility to be good corporate citizens who do not profit off of children by maintaining that ‘a contract is a contract.’”
UPDATE 7/7/2011: Bank of America spokeswoman Diane Wagner said "We provided an explanation of general types of SWAPs and provisions and how we act as an intermediary. We recommend that the teachers discuss the actions related to the specific SWAP and their concerns directly with the Chicago Board of Education." She also said the banking giant has given more than $1 million in support to students in the CPS system through youth organizations.
The city and state’s interest-rate swaps have been the target of other advocacy groups. The city of Chicago currently has nine interest-rate swap deals, paying out $74.2 million annually in interest rates. A collective $25 million goes to JP Morgan Chase and Bank of America alone. The state, meanwhile, pays $162 million annually in the same kind of taxpayer-backed loans.