Banks are back in the news. And it is evident that the SCUMBAGS continue to run amuck, doing whatever they please without any form of real regulation.

Who are these SCUMBAGS? Simply put, they are the banks that created the 2008 crisis. They continue to pay themselves eight figure bonuses even after receiving a tax payer bailout. They are responsible for practically every 'collapse and crisis' over the past 15 years: Long Term Capital Management, Enron, the dot.com bust and the housing crisis.
The SCUMBAGS are the Sum of Citi, UBS, the Morgans (both JP and Stanley), Barclays & Bank of America, AIG and Goldman Sachs.

(You might ask, 'Hey Matt, what about Wells Fargo, Deutche Bank and countless others?' The problem is there are just too many to list, so I tried to capture the biggies.)

So, our only choice as Americans is to start voting with our wallets. To take back America, let's hit them where it hurts by ending all profitable dealings with banks who continue to be funded by and rely on the support of the American Taxpayer. The timing couldn't be better, with Bank Transfer Day coming up on Nov. 5.

The Ongoing Inside Job

The other night I watched 'Inside Job,' the Emmy award winning documentary that covered the infinite immorality of the banks who caused the Financial Crisis of 2008. It's a must-see for anyone with even a casual interest in the future of America.

While watching the movie, two thoughts kept swirling around in my mind:

1. Our government is currently unwilling to do anything to fix the problems that caused the crisis. Banks are still wildly overleveraged and paying themselves billions in compensation while there has not been a single bill passed to effectively regulate them.

2. Why in the world would any person who cares about the future of the U.S. continue to do business with these guys?

People in the movie keep repeating, '...our government is being run by Wall Street.' And this is largely true. Political contributions made by Wall Street have exploded in the past 20 years. As the movie points out, there are five lobbyists employed by Wall Street for every member of the U.S. Congress. Wall Street corrupted the rating agencies, they corrupted the mutual fund industry, they corrupted the media and worst of all, they corrupted our government.

Not a single Wall Street banker has been charged with any sort of crime or had a civil suit filed against him. Given that the U.S. government is clearly not willing to deal with the SCUMBAGS, our only choice is to deal with them on our own.

A Small Act of Patriotism

My mom always said, 'Be careful of the company you keep.' She meant friends and acquaintances, but I think her timeless wisdom should also cover the people we do business with. Shouldn't we be cognizant of the 'companies' we do business with and only support those who support the common good?

  • Would you eat at a restaurant that you knew was dealing drugs to teenagers out their backdoor?
  • Would buy clothes from a manufacturer that was employing child slave labor?
  • Would you buy gas from an oil company that was knowingly destroying our environment?

Then why bank with bankers who are deliberately destroying America's economic future for their own gain?

Now, there are grand acts of patriotism and there are small acts of patriotism. My simple small act of patriotism -- and I ask that you to consider the same -- was to pull my financial support from the SCUMBAGS.

If we start moving our money away from the B of A's, the Morgans and the Goldmans, eventually it will hit them where it hurts. Every dollar of deposit that is removed from these institutions equates to $30 of capital they can't use to create profits. If a person removes $100,000, the bank has to deleverage by $3,000,000 -- and this is a meaningful amount.

The only way to truly effect change in our nation's banking system is to do the following:

  • Do not deal with any bank that accepted TARP. For a list of banks that accepted TARP funds, click here.
  • Do not deal with any financial institution that is publically-traded. (For full disclosure, I do use one publically-traded brokerage due to specific exposure requirements for a few of my strategies.)
  • Do not deal with any bank or brokerage institution that wouldn't be in compliance with Glass-Steagel, the legal framework that provided our country with stable banking for over 70 years. (The essence of Glass-Steagel was that it separated banking functions from other types of financial services -- brokerage, investment banking, insurance, etc. For more info on Glass-Steagel, click here.)

I know this will be an inconvenience for some. So here are a few ideas:
If You Need a Trading or Brokerage Account...

Fidelity Investments and Scottrade are privately-held brokerage institutions that do not officially engage in banking. Both meet all the above criteria, have low commissions and in my experience, remarkable customer service.

Any fee-only adviser will be able to assist you with your account at one or both of these institutions. If you want a full service broker, then LPL (Linsco Private Ledger) is one of the larger brokerage firms that meet all of the above criteria.

For Your Checking and Savings Accounts...

I bank with USAA. If you are a member, it is an ideal way to bank. All bills and transactions can be done online, any UPS store will accept your deposited checks, you can payoff your USAA credit card directly from our bank account and you'll get 3-4 ATM transactions free each month.

If you are not a USAA member, then there are likely several regional banks in your area that fit all the above criteria. If you travel a lot and need a nationwide bank, then leave an 'operating account' with a Chase or B of A but keep all your credit cards and large balances with your hometown bank.

The Investing Answer: About the only feasible way for the SCUMBAGS to be contained is for conscientious American's to 'go on strike' against them. Move your business, or at least your profitable business, to responsible financial institutions.

Often in a democratic society, the actions you take inside of the ballot box are not as significant as the actions you take outside the ballot box. We can take back our economy, one account at a time.

This is a guest post from Matthew McCracken, a Texas-based Registered Investment Adviser (RIA) and founder of McCracken and Company.

Disclosure -- The author is short various securities mentioned in this article. In the month prior to the printing of this article, his portfolios have been short PRU, LNC, MET, GS, BAC and AGO. At the time of this article's posting, his firm may or may not continue to maintain these positions and may or may not add to these positions in the coming months.