Tuesday, July 29, 2008

Where Local Makes Love to Sustainable: SRI Banking

Local and regional banks are getting a bad rap thanks in large part to the bevy of socially parasitic mortgage brokers that dealt out most of the subprime loans that are the weight around the neck of our national financial infrastructure right now. Of course, the subprime issues are more a symptom of corporate excess than the underlying cause, but that's neither here nor there. For now, suffice it to say that local banks are not all bad. In fact, many of them promote sustainable, socially responsible solutions to their regions.

So what are these banks, and how do you join the fray?

While the number of purely sustainable solutions are small, the concept is alive in a couple of banks worth looking at, even if from afar. And if you're not already in CRATX, the Community Reinvestment Act Fund (as detailed here), you should definitely consider it. But here are some truly excellent solutions to make more than just your stocks sustainable or responsible, but to extend the same thinking to your savings and cash.

Wainwright Bank & Trust

I just recently mentioned Wainwright's stock, WAIN, as a part of my last Seeking Alpha article, but their Green business loans and Equal Exchange CDs are worth getting excited about. For a minimum of $1,000 and a 3 year commitement, you can open an Equal Exchange CD in which the funds are loaned to Equal Exchange which invests in Fair Trade coffee farms and farming practices. Not only is this exciting from a sustainability standpoint, but the APY is a none too shabby 3.00%, costing only 70bps from average CD rates.

There is always a catch, of course - there are penalties for early withdrawal (situationally depending). If you already have an account at Wainwright, you can have CD interest depostited directly into your money market, checking or savings accounts, a nice little perk. The CD is FDIC insured and sustainable, what more could you want?

Well, if you're a homeowner interested in greening your house, Wainwright offers a Green Loan specifically designed to target green home improvements. Green loans offer rate reductions and no closing costs, all perks to make the investment in reducing your long term energy costs. If you're a non profit, Wainwright is one of the few institutions country wide with a division devoted entirely to communtiy and non profit development. With over $500M in community investment loans, Wainwright cements itself as one of the leaders in socially responsible and sustainable banking.

Not to mention the stock is currently paying a 3+% dividend yield. See more information at www.wainwrightbank.com.


ShoreBank is the original socially responsible bank. With a 35 year history, a diverse management team, and a long standing commitment to community investing, ShoreBank is now the gold standard of SR banking, despite it's growing corporate entities. For the retail consumer, ShoreBank has a bevy of Developmental Deposit accounts (checking, savings, money market, time deposit, and IRA) that target community development projects with the funds. They offer market rate APYs, meaning you're not paying in yield to be responsible. So, all things being equal, there's no good reason not to be responsible.

Beyond just the typical deposit account, ShoreBank has excellent online high yield savings accounts that offer higher yielding rates and the same social developmental projects. Best of all, the high yield savings accounts have $1.00 minimums, online access, and no monthly fees.

The newest product on ShoreBank's ever increasing roster is the EcoDeposit through their ShoreBank Pacific branch. EcoDeposits are designed to invest in companies that reduce energy inefficiencies and waste in an effort to preserve the Pacific northwest forests. In many ways, ShoreBank has designed these programs to act almost as charitable contributions that pay you for your efforts.

For more details, check out www.sbk.com.

So be smug and save sustainably while you invest sustainably.

1 comment:

Rodney North said...

Thank you for telling folks about our unique Fair Trade CD with Wainwright.

You, and your readers, will like to know that the rate on the CD might be more competitive than you thought. I don't know your source for determining predominant CD rates, but according to this search at Bankrate.com (done at the time of your post) 8 locally offered CD's averaged only 2.93% (vs our 3%).

If that's typical then folks are getting both a competitive rate AND a great social impact with this CD.

By the way the magazine American Banker also wrote about the CD at some length for those who'd like their take on it.