Action #7: Open an account at a socially responsible bank
You will sleep better at night if you know that your bank is using your money to promote justice in the world. So how do you begin? Since banks typically invest their money in a wide range of corporations and individuals, you would have to evaluate every one of these entities to determine a bank's level of social responsibility.Instead of putting your money in large corporate banks, whose overall impact is hard to determine, deposit your money in locally owned banks that have a strong commitment to contributing to their community. It is essential that your bank put the interests of its customers and community first, rather than throwing your values out the window to increase its bottom line.
A number of financial institutions dedicate themselves to making sure your money helps rather than hurts people. By placing your money in these institutions you can rest assured that your money will help build new classrooms, renovate low-income neighborhoods, create small businesses, or aid needy families in buying their first homes. When you support a financial institution that is truly committed to its community, you are helping that community retain its wealth instead of having it siphoned off to one of the world's financial centers through corporate banks. You are helping create a strong, self-sufficient economy in your community.
Don't be discouraged by the idea that you have too little money to make a difference. When combined with hundreds of other customers these small amounts of money can make a big difference. Initially, investigating banks and changing your accounts requires an investment of time, but it will have positive impacts every day for years to come. Just think, you'll be helping the world even while you're at home sleeping!
AREN'T OUT-OF-STATE BANKS A HASSLE?!
If after doing some homework you can't find any socially responsible banking institutions in your area, don't worry. Most banking transactions today involve writing checks or Automated Teller Machines (ATMs), so having an out-of-state bank is not a hassle anymore. The only difference is that you won't be able to use ATM's to deposit your checks. If that's something you need, consider having two accounts, one in-state and one out-of-state.
OVERALL RATINGS OF MAJOR BANKS
The following ratings are based on reviews from a compilation of sources that have been used to determine the overall social responsibility of each bank.GOOD Chase Manhattan, Chemical, (JP Morgan), (Bank One)
FAIR Bank of America, US Bank, (Wells Fargo) (Key Bank)
POOR Citibank, The Money Store
Note that all banks listed in parentheses are at the bottom of their rating category
Community Development Banks operate very much like "normal" banks, but their business is the permanent, long-term economic development of low- and moderate-income communities. Community Development Banks offer all of the services that the giant corporate banks do (e.g. checking and savings accounts, certificates of deposit (CD's), money market accounts, lending, FDIC insured) but they provide one important additional service--a commitment to economic justice. Click here for some of the best-known Community Development Banks.
An increasingly popular alternative to banks, credit unions are not-for-profit financial institutions with a mission to serve their communities. A credit union collects deposits and loans them to members at low interest rates. Most credit unions have specific membership criteria (usually as an employee of a certain organization or a resident of a certain area). Credit unions are an excellent alternative to large corporate banks. They consistently earn excellent ratings from consumers by charging lower fees and having better customer service. The National Credit Union Share Insurance Fund (NCUSIF) protects all federal (and many state) credit union deposits up to $100,000.
Community Development Credit Unions (CDCU) commit to investing in low-income neighborhoods (similar to Community Development Banks). They also provide low cost financial services to low income communities. CDCU's accept deposits from individuals and institutions outside of their usual field of membership. It is an amazing feeling to know that they are using your savings to reinvigorate low-income neighborhoods instead of just padding the pockets of corporate bank CEOs. Click here to find some CDCU's and a credit union near you.