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Sunday, April 15, 2012

Liberal Left 'Nation" caught plugging “political illusions”— Henwood

Why should a New York magazine, on ‘localist’ grounds, encourage doing business with a bank 1,200 miles away? Doug Henwood asks.
Editing, new material by Carolyn Bennett
From Friday April 13, 2012, article “The Nation moves money, again” by Left Business Observer News founder and editor, Doug Henwood

It seems that on Friday morning the liberal-left Nation Magazine sent an email “touting its branded affinity VISA card issued by UMB Bankdescribed by the magazine’s associate publisher, Henwood reports, as “‘a small, regional bank recommended by the Move Your Money project, a project we [The Nation]  support’ and therefore in accordance with the goals of the Occupy movement.” UMB is a Kansas City, Missouri, financial institution, roughly 1,200 car miles from New York City. 

[NOTE: An affinity credit card program allows an organization to offer its members and supporters —  those who have an ‘affinity’ for that organization — a credit card that promotes the organization’s brand and imagery each time a cardholder uses the card.

An affinity credit card program may pay the brand-owning organization a bonus for each new account generated, plus a percentage of every transaction charged to the card. To recapture the costs of offering a group’s affinity credit card, issuers often prefer working with large organizations that allow direct access to members.]

Taloned, Tentacled: UMB connections
UMB and Health Savings Accounts
“UMB is big in the Health Savings Account (HSA) racket — the snake-oil favorite of right-wingers,” Henwood says. The HSAs “are tax-sheltered savings schemes that typically come with high-deductible health insurance policies attached.” It is an approach to the healthcare problem that is exclusive. It is “individualized, high-deductible and market-centered.

A money saver for employers, attractive to the young, the healthy, the well-off, and people who believe themselves unlikely to get sick, erasing people likely to get sick and uninsured people (If you need a doctor, you can dip into the savings account, because you’re going to have to pay thousands of dollars out of pocket before the insurance kicks in) — the kind of approach that would have seemed, Henwood says, “antithetical to everything The Nation stands for.”

The Nation’s Affinity, Move-your- money Bank

UMB Bank, Henwood says, is “another iteration of the classic ‘Money Mover’s institution’:  Flush with more money than it can invest locally, it loads up on securities. A review of UMB Bank’s latest annual report:

46 percent of UMB’s money invested in securities (unspecified but likely a “mix of Treasury bonds, mortgage bonds, corporate bonds,” Henwood says)
6 percent on deposit with other banks (taken together exceeds 50 percent)

UMB is an establishment of “big regional players in mutual funds, wealth management, and private banking, all moderately to seriously upscale stuff,” Henwood comments,  “and like the big guys, they are looking to make more money out of fees — rather than traditional deposit-taking and loan-making. Annual report continued:

37 percent goes out in loans (0.8 percent in small-business loans, “beloved of the small-bank fan club”) [well under 50 percent]

Liberal-left Political Illusions
All is not what it seems

Doug Henwood says he does not “begrudge The Nation [foundation] magazine’s trying to raise money… and if an affinity credit card raises significant money for them, they should go for it.”  However, “it would be nice if, when shaking the cup, they did not encourage political illusions about finance.”

Sources and notes

“The Nation moves money, again” (Doug Henwood), April 13, 2012, http://lbo-news.com/2012/04/13/the-nation-moves-money-again/?utm_source=feedburner&utm_medium=email&utm_campaign=Feedpercent3A+LboNewsFromDougHenwood+percent28LBO+News+from+Doug+Henwoodpercent29
Article posting includes an audio/video/photo media file

Henwood continues: “The philosophy behind HSAs summarized in a recent press release (‘UMB Announces 36 Percent Increase in Health Savings Account Balances’) by UMB Healthcare Services CEO Dennis Triplett: ‘We are excited to see the continued adoption and acceptance of consumer-directed health care [that] …empowers individuals to take personal responsibility for their health and expenses, and enables employers to better reign in rising health care costs.’” Henwood’s translation: “If people have to pay through the nose to visit the doctor, they’re going to think twice before booking an appointment. That’s ‘empowerment’ for you.”

Doug Henwood edits LBO [Left Business Observer], a newsletter he founded in 1986. Henwood also hosts Behind the News, a weekly radio show covering economics and politics aired on KPFA-Berkeley. The program rebroadcasts on several other stations across the United States and has a worldwide audience via its Internet archive. Henwood is author of the book Wall Street, available for free download on his website, http://lbo-news.com/about/

An affinity credit card program allows an organization to offer its members and supporters —  those who have an ‘affinity’ for that organization — a credit card that promotes the organization’s brand and imagery each time a cardholder uses the card.

An affinity credit card program may pay the brand-owning organization a bonus for each new account generated, plus a percentage of every transaction charged to the card. In some cases, the brand-owning organization will form a revenue and profit sharing joint venture on a 50/50 basis. The venture is funded by the interchange income from the card scheme, such as MasterCard or VISA fees, charges and credit lent to cardholders.

Affinity credit cards are offered by many retailers, shopping centers, airlines, universities, alumni associations, sports teams, professional associations and others, and increasingly by small and mid-sized nonprofits and membership-based groups that rely on these programs for incremental revenue.

The first example was Diners Club in New York, and the concept is now widespread and global. In fact, the explosion in popularity of affinity credit cards helped generate the global expansion on the number and use of credit cards in general.


The affinity credit card industry is changing. 
To recapture the costs of offering a group’s affinity credit card, issuers often prefer working with large organizations that allow direct access to members.
 This provides the issuer with the group’s implied endorsement and access to members for the purpose of cross-marketing credit cards and other financial products.
 An affinity group with sufficient number of members, say in excess of 5,000, and who can give access to its membership base will find many banks willing to issue the credit card. http://en.wikipedia.org/wiki/Affinity_credit_card_scheme

UMB website (and Wikipedia) notes

UMB Financial Corporation is an American financial services company based in Kansas City, Missouri with operations in seven, mostly Midwestern, states. The company owns commercial banks, a brokerage company, a community development corporation, a consulting company, a mutual fund servicing company, and 16 other subsidiaries. As of December 31, 2009, it had over $11 billion in assets. http://en.wikipedia.org/wiki/UMB_Financial_Corporation
UMB Bank, n.a., is a subsidiary of UMB Financial Corporation, a diversified financial services holding company founded in 1913.

Stock Symbol: NASDAQ: UMBF; Holding Company: UMB Financial Corporation; Lead Bank:  UMB Bank, n.a.; Headquarters: UMB Financial Corporation, 1010 Grand Boulevard
Kansas City, MO 64106

Grand Distribution Services, LLC
J.D. Clark & Company
Kansas City Financial Corporation
Kansas City Realty Company
Prairie Capital Management, LLC
Scout Distributors, LLC
Scout Investments, Inc.
UMB Banc Leasing Corp.
UMB Bank & Trust, n.a.
UMB Bank Arizona, n.a.
UMB Bank Colorado, n.a.
UMB Capital Corporation
UMB Community Development Corporation
UMB Distribution Services, LLC
UMB Financial Services, Inc.
UMB Fund Services, Inc.
UMB Insurance, Inc.
UMB National Bank of America
UMB Realty Company, LLC
UMB Redevelopment Corporation
UMB Trust Company of South Dakota
United Missouri Insurance Company

Chairman and Chief Executive Officer, Mariner Kemper,
President and Chief Operating Officer, Peter J. deSilva,
Vice Chairman, Chief Financial Officer and Chief Administration Officer, Michael D. Hagedorn,
Investor Relations, Kay McMillan
Media Relations, Pam Blase,
Corporate Communication, Mandie Nelson, https://www.umb.com/AboutUMB/Company/Facts/index.htm


Affinity doors... donated to DU for ongoing wetland conservation initiatives.
Latest Credit Card Debt Statistics Balances on consumer credit cards fell in...


The Nation, cover dated May 3, 2010


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