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Banking With A Conscience

Have you really thought about what your bank invests in?  Normally we just pop our money into the bank and that’s that. No thoughts about it.   But digging a little deeper you become aware that for every dollar you invest in your Checking, Savings or Cd’s allows the bank to lend out $10 dollars.  YES a 1:10+ ratio.  Now you need not be confused why there is a hold placed on your deposited checks.  The higher average float money the more the larger the bucket to money available to the bank to make loans.   Banks are “C” corps with a mandate to maximize profits.   There are alternative Banks out there.  We have found that some banks have chosen to invest their bucket of cash into their local sustainable communities instead of environmentally damaging activities like Oil, coal, fracking or arms.

An increasing number of people are therefore actively seeking out “healthier” banking options. This means banks that have an obvious positive social or environmental benefit and/or banks that are focused on benefitting the local economy; banks with different business models; and NONPROFIT banks owned by their members – credit unions.

Banking with a local bank or credit union helps the local economy in so many very important ways. Small businesses, which create the majority of new jobs, depend heavily on small, local banks for financing. The primary activity of almost all small banks and credit unions is to turn deposits into loans and other productive local investments. Although small and mid-sized banks control less than one-quarter of all bank assets, they account for more than half of all small business lending. Big banks, meanwhile, allocate relatively little of their resources to small businesses. The largest 20 banks, which now control 57 percent of all bank assets, devote only 18 percent of their commercial loan portfolios to small business.

Another positive banking option is choosing a bank that “banks for good”: the good of the planet and the good of its inhabitants. These banks may or may not invest in your local community but they are beholden to make investments around the world that have clear sustainability principles. Saarman Construction, being concerned with the people and planet’s future, chooses to do all of its banking with New Resource Bank a registered BCorp. New Resource Bank’s mission is to advance sustainability with everything they do—the loans they make, the way they operate and their commitment to putting deposits to work for good.

The idea that a bank should look beyond just financial returns and try and play a role in building a different kind of economy is foreign to most of us here in the US. But in ethical banking is no longer and oxymoron, it is a reality. You CAN make a positive and conscious choice about where you bank there are so many alternatives. Invest your money in an institution that will in turn invest it in ways that support YOUR values. It’s a good place to start.