| e3bank was recently featured as a green investment in our green investing newsletter, Progressive Investor. |
At a time when people have lost faith in financial institutions, there’s a push toward taking your money out of banks that are "too big to fail" and re-investing it in community banks and credit unions. Besides everything you’ve heard about the big banks during the past year, most have miserable environmental and social records, and finance environmentally destructive projects like coal plants.
Among the hundreds of community banks are a handful of green community banks, all of which offer you "banking with your values" by investing in local communities, offering personal relationships, and often better interest rates on checking accounts. They channel your funds into projects that build healthy communities, helping small businesses and investing in affordable housing.
Thanks to electronic banking you can deposit and move funds with any bank, anywhere. Keep the minimum amount necessary for a free checking or savings account at a conventional bank that has lots of ATM machines. Or write a check from your community bank to the conventional bank once a month to cover your cash needs. Most credit cards are issued by the mega-banks – you can also switch those to support your social values.
In March, the Global Alliance for Banking on Values was launched by 11 of the world’s leading sustainable banks. The banks, which have assets of over $10 billion and serve over seven million customers in 20 countries, are working together to build a positive alternative to the global financial system.
Banks include BRAC Bank – part of the BRAC Group, the world’s largest microfinance institution – ShoreBank, a community bank based in Chicago, and Triodos Bank, Europe’s leading sustainable bank.
Speaking at the launch, Peter Blom, CEO of Triodos Bank, said, "Unlike their enormous mainstream contemporaries, these banks are profitable, growing and crisis resistant. When it was unfashionable to do so they stuck to simple, core banking services that balance people, planet and profit."
Green Banks
San Francisco-based New Resource Bank opened in 2005, making green loans available for projects that conventional banks won’t finance, such as their solar home equity financing loan. Their fixed-term solar certificates of deposit help fund solar projects in the state. Last year, First Green Bank of Florida completed its fundraising in just five weeks and closed its first year with $80 million in assets and profits that exceeded expectations. They’re close to breaking ground on their LEED platinum headquarters. Common Good Bank is working on an innovative community network structure, beginning in western Massachusetts.
e3bank is poised to open as a community bank in the greater Philadelphia region. Small and large investors alike can buy shares in the bank – a first for the U.S. banking industry. Individual investors can buy shares for as little as $5,000 as part of e3’s mission to democratize banking by creating diverse, grassroots ownership.
Headquartered in a Philadelphia suburb, customers will be able to reach the bank via mass transit, but they’ll be able to do virtually all business online, keeping e3’s environmental footprint and operating costs low. Customers will be able to scan deposits online, use digital signatures to sign loans and chat online with bank associates via webcams.
Co-founder Sandy Wiggins, a developer of zero energy homes and former chair of the US Green Building Council, says, "Being a banker was never on my radar screen but as someone that’s been involved in green real estate for a long time, it was clear the financial industry was a persistent barrier to making progress in greener building projects. The prospect of creating a bank that was the lubricant rather than the friction in the system for building a sustainable economy pulled me in."
Every dollar of E3 bank capital that’s deployed will be analyzed for tons of carbon mitigated or avoided. e3 will give lower interest rates for loans for higher levels of sustainability: a green building loan, for example, will get a lower interest rate if it achieves LEED Platinum than if it achieves a lower LEED certification of silver or gold.
In contrast to conventional banks, whose loan decisions are based on up-front costs and a borrower’s ability to pay, e3bank’s LEED-accredit loan officers will understand the benefits of paying more up-front to gain longer terms energy savings and other environmental benefits. Loans will be available for retrofitting buildings to incorporate energy conservation and renewable energy, and loan officers will even be able to advise customers on the latest green building innovations.
ShoreBank (Chicago, IL)
www.sbk.com
ShoreBank opened its doors in 1973 as the first community development and environmental bank in the US and now has $2.7 billion in assets. The bank, which serves the social needs of the Chicago area by lending to urban re-development projects, was awarded a $35 million New Markets Tax Credit allocation from the Recovery Act. It’s using the resources to encourage property owners in Chicago, Cleveland and Detroit to do energy retrofits and to incorporate green design in renovation and construction projects.
"By facilitating investment in energy efficiency and alternative energy, we can keep utility costs manageable, promote green collar jobs, and stimulate economic activity in underserved areas," said Joel Freehling of ShoreBank. "Despite the economic climate, sustainable companies like Indie Energy (Chicago, IL) in the geothermal industry and Kilroy’s Home Insulation (Cleveland, OH) are solid financial performers and have added and invested in new employees, without any additional stimulus," he added.
ShoreBank has invested over $3.5 billion in local communities to finance the purchase and renovation of 55,000 units of affordable housing and the creation of 11,000 new jobs for local residents.
ShoreBank Pacific (3 locations in Washington, Oregon)
www.eco-bank.com
In 1997, the first US green bank opened to finance the "conservation economy of the Pacific Northwest" by supporting local green company businesses and projects. The bank attracts depositors from around the country and lends to small businesses that are pursuing sustainable practices. The People’s Food Co-op in Portland, OR. is a typical borrower: while they would have had a hard time convincing a conventional bank to loan a co-op funds for a new building, ShoreBank gave them $388,000 precisely because of that and the fact that they would incorporate green building practices. Examples of typical borrowers include an environmentally focused school, expansion funds for an organic dairy, and a certified wood furniture manufacturer. The bank also assigns staff to help potential borrowers reduce waste and pollution, and conserve natural resources.
Self-Help Credit Union, Durham, NC
www.self-help.org
Their Center for Responsible Lending has an advocacy team that litigates fair lending practices for victims of predatory lending facing foreclosures and financial ruin. Self-Help also engages in direct home lending to qualified low-income borrowers and has financed over $4 billion in loans through its secondary mortgage market programs. Self-Help purchases loans from partner banks, credit unions, and Community Investing Institutions, and sells them to Fannie Mae, helping give liquidity to these partner institutions. To be eligible for the program, loans must meet responsible lending standards – meaning that no high-cost loans are included. This results in preserving home ownership opportunities for working-class Americans, particularly people of color.
Permaculture Credit Union, Santa Fe, NM.
www.pcuonline.org
The web site says, "The history of financial institutions is one of focus on the bottom line which results in overexploitation of the earth’s resources. Now, an innovative new financial institution – Permaculture Credit Union – allows its members to share their excess with other members of like mind who would use it for sustainable projects and, at the same time, take care of the Earth." Now that’s a bank!
Started in 2000, Permaculture provides loans for environmentally conscious projects. Members can apply for small loans of $5000 -30,000 at discounted rates for home energy efficiency upgrades; renewable energy generation; permaculture landscaping; water catchment and delivery; farm machinery; and fuel efficient automobiles.
Wainwright Bank & Trust Company (Nasdaq: WAIN), Boston, MA.
www.wainwrightbank.com
Founded in 1987, Wainwright Bank serves neighborhoods in the Boston area, offering commercial loans for affordable housing, homeless shelters, HIV/AIDS service, community health centers, and environmental protection.
The bank finances the purchase and preservation of land including New Hampshire’s Connecticut Lakes property, the largest unbroken tract of privately held forestland in the state. It provides lines of credit and other types of short-term financing to nonprofits like Silent Spring Institute (Newton, MA.) and Earthwatch Institute, and financed the Union of Concerned Scientists headquarters, among others. It screens all its investments based on social and environmental criteria. Its GreenLoan home equity loan gives a discounted rate to people that install solar energy systems.
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Find community banks.
Responsible credit cards.
Global Alliance for Banking on Values Members:
Alternative Bank ABS, Switzerland
Banca Popolare Etica, Italy
Banex, Banco del Exito, Nicaragua
BRAC Bank and BRAC Microfinance Programme, Bangladesh
GLS Bank, Germany
Merkur Bank, Denmark
Mibanco, Banco de la Microempresa, Peru
New Resource Bank, United States
ShoreBank Corporation, United States
Triodos Bank, The Netherlands
XacBank, Mongolia, [sorry this link is no longer available]
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