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February 2010

When Breaking Up Is the
Right Thing to Do

What a difference a year makes!

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Last year, just before Valentine’s Day, Green America launched our “Break Up With Your Bank” campaign. Anger at the big banks and their big bailouts was running high, and the feedback from Green Americans was tremendous, as so many of you switched from the megabanks to community development banks.

Since last year, the community-banking movement has been joined by many others (including the Huffington Post’s great high-profile “Move Your Money” campaign). If you haven’t already, join us now in breaking up with your mega-bank, and moving your money to a community development bank or credit union.

The first steps really are easy: choose a community bank, open an account, and begin banking with your new, socially responsible bank. You can close the mega-bank account right away, or over time you can move more and more of your banking relationship from the mega-bank to the community bank. And don't forget to write that “dear John” letter (or email) to the mega-bank telling them why it's over between you.

So check out our list of FAQs below, and as always, use CommunityInvest.org to find greener banks and investment vehicles that are right for you. Maintained with the Social Investment Forum (SIF) since 2005, CommunityInvest.org pulls the best community investment resources together all in one place. Since 2001, Green America and SIF have helped steer nearly $3 billion in investment to community investing institutions nationwide.

After a year in which the worst practices of the biggest banks were on display for all to see, it’s time for better banking with responsible institutions that do right by people and the planet.

Q. What exactly is the difference between a "community bank" and a community development bank?

A. The difference between community banks and community development banks is that while both lend within their region only community development banks pursue a mission of directing their lending to the people who have been overlooked by traditional lenders, and help to build jobs, housing (including low-income housing) and social services. The resources in this e-mail direct you toward community development banks and credit unions.

Q. I want to open a checking or savings account with a community development bank, but I don’t think I have one in my area. What do I do?

A: Check CommunityInvest.org first. There might be a bank or credit union for you nearby that you haven’t heard about yet. (You can also search here for more community development banks, and here for more community development credit unions.) The other good news is that the proliferation of online banking opportunities means you can still open a checking or savings account in a community bank that might not be in your neighborhood and do all of your banking remotely – through direct deposit, online bill-pay, etc.

Q. That’s great, but I need more immediate access to my money. How can I get ATM access if my bank is in another community or even another state?

A: That’s a great question, and one solution is to open up two accounts. For example, Green America executive director Alisa Gravitz maintains her primary account with a community credit union in North Carolina, though she lives in Washington, DC. For times when she needs cash in DC, she has free access to a larger bank’s ATM by keeping a small balance in a separate savings account. Most banks have different minimums for such accounts, but if you can maintain the minimum, most savings accounts and ATMs are free.

Q. It might take me awhile to set up a banking solution like that. Is there another first step I can take today?

A. Sure, you can consider shifting your credit card usage to cards issued by community development banks. Our Real Green newsletter has profiled several cards offered by responsible banks that invest in communities from Portland, OR to Durham, NC. (Check out the full article here, and click here for more information on the credit card that Green America now offers in partnership with our allies at ShoreBank Pacific.)

Q. I’ve already shifted my checking account, savings account, and credit cards. What else can I do to break up with the mega-banks?

A. CommunityInvest.org links you to other financial products like loan funds, bond funds, and venture capital opportunities . Just like with checking accounts, savings accounts, and credit cards, you can be sure your investments with these products are going to help low- and moderate-income people improve their communities.

Q. I'm done! I shifted all of my banking! Now what?

A. Did you write your "dear John" letter to your mega-bank? Tell your old bank about the good work your new bank is doing for underserved communities, and call out all of the practices of your mega-bank that drove you away. There's plenty to choose from.

The mega-banks created the predatory lending crisis, lend money to dirty coal and other environmentally destructive industries, and jacked up interest rates on their credit cards in advance of last year's reforms. Right now, many of them are lobbying aginst the Consumer Financial Protection Agency (CFPA), which would protect consumers from their worst practices, even after accepting huge bail-outs from those same consumers' tax dollars.

And in the middle of our country's deep financial crisis (largely caused by the mega-banks' policies), the Wall Street Journal reports that the top banks are set to hand out record bonuses this year. You can tell your old bank that the overcompensated fat-cats at the top don't deserve any more of your money when you can set up the same services with bankers who share your values, and pursue a mission of using money as a tool to improve people's lives.