October 2008 | On Our Radar
The Company We Keep
Socially responsible banking lets you use your dollars to make change
Very few of us have a personal attachment to the company with which we bank. Maybe you signed up with U.S. Bank because it was giving out free t-shirts on your first day of college, or Bank of America because it had the closest ATM to your apartment, or switched to Washington Mutual to punish Citibank for refusing to refund your late fees.
But if the subprime mortgage meltdown and increasingly dire economy have got you nervously eyeballing your finances, wondering if a better place to put your money exists, the answer is, it does. You could leave your hard-earned dough in a faceless, multinational institution that might funnel it toward ethically and environmentally suspect projects… or you could invest in a local, sustainable bank dedicated to growing green businesses and keeping money circulating in the community.
Socially responsible banking began in the slums of 1970s Chicago, when, against all conventional wisdom, ShoreBank used deposited funds to invest in revitalizing the local community. In just over a decade, they helped reverse a legacy of “redlining,” or denying loans to low-income borrowers and improved quality of life for many inner city neighborhoods. Now expanded to Cleveland, Detroit and the Pacific Northwest, ShoreBank (whose motto is “Let’s Change the World”) still offers low-interest loans to communities in need, while leading the industry with its “sustainable banking” program.
“We look at the triple bottom line,” said Erin Fitzgerald, director of marketing for ShoreBank Pacific. “We’re building businesses for the long term that support the economy, the environment and our communities — it’s about keeping the money local and within our Pacific Northwest bioregion.” ShoreBank Pacific offers sustainability consulting, educates borrowers about product life cycles and helps them strategize energy efficiency. It’s also teamed up with local nonprofits on a line of credit cards that can offset carbon or support specific charity campaigns.
Credit unions also provide an alternative, nonprofit model for investing in local communities. Members who meet the union’s criteria can hold accounts and take out loans with low fees and interest rates. The Seattle Metropolitan Credit Union has started using these rates to provide incentive for its members to make sustainable purchases. With its innovative “green loans” program, SMCU offers reduced interest rates on loans for hybrid vehicles and green building projects. Members with savings and checking accounts at SMCU know that their money is helping other people take their first steps toward sustainability.
New Resource Bank in San Francisco knows sustainable change. From its LEED Gold-rated headquarters to its generous loan program for solar panel installation, New Resource raises the bar for eco-conscious banking. Its funds are invested in organic foods, green-tech and alternative energy businesses in the Bay Area. Stressing personal service, founder and vice chairman Peter Liu says the bank provides even better customer service than its big competitors with easy online banking, e-statements and live customer service hotlines. But the chief draw for customers is the opportunity to make a difference. “People are realizing that the time has come,” says Liu, “for green to evolve from a social movement into a market opportunity that transforms our economy.”
— Jessica Kraft
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