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About Green Banking

Americans are starting to turn to eco-friendly banking as a way to help reduce the carbon footprint from their normal banking activities. This movement away from branch and paper banking is being led by green banks that believe in social responsibility.

The easiest way for you to bank green is to start using the online banking services that are available. Benefits of online banking include less paperwork, less mail and less driving to branch offices, which all have a positive impact on the environment. Interestingly, online banking can also increase the efficiency and profitability of a bank. A bank can lower their own costs that result from paper overload and bulk mailing fees as more customers use online banking.

Green banking can also reduce the need for expensive branch banks and customer service representatives. So if a bank is not yet utilizing green banking, shareholders of the bank may start asking....why not?

Banks can do much more to help the environment than just promote online banking. A truly green bank will reduce their carbon footprint by building more efficient branches, implementing energy-efficient operational procedures, offering transportation services for their employees, promoting sustainable banking and increasing their lending in environment-sensitive industries. Banks can also support eco-friendly groups and raise money for local environment initiatives.

Bank products and services can also reflect a green banking commitment.

Green Deposits: Banks can offer higher rates on CDs, money market accounts, checking accounts and savings account if customers opt to conduct their banking activities online.

Green Mortgages and Loans: A bank can offer green mortgage with better rates or terms for energy efficient houses. Some green mortgages allow home buyers to add as much as an additional 15 percent of the price of their house into loans for upgrades including energyefficient windows, solar panels, geo-thermal heating or water heaters. The savings in monthly energy bills can offset the higher monthly mortgage payments and save money in the long run.

The Energy Efficient Mortgage (EEM) is a type of HUD-approved green mortgage that will credit you for your homes energy efficiency in the mortgage itself. Many home improvements also qualify for the energy tax credit. Anyone undertaking an energy-saving house project, should shop around for a bank that offers a special rate for a green mortgage or loan.

Green Credit Cards: A green credit card allows cardholders to earn rewards or points which can be redeemed for contributions to eco-friendly charitable organizations. These cards offer an excellent incentive for consumers to use their green card for their expensive purchases. Imagine the millions of dollars that could be raised for worthwhile environmental groups if green credit cards really took off.

Green Reward Checking Accounts: A bank product called a reward checking accounts pays a bonus rate for customers who go green. Customers can earn higher checking account rates if they meet monthly requirements that might include receiving electronic statements, paying bills online or using a debit or check card. With this banking product higher rates and eco-friendly living go hand-in-hand.

What can you do?

Converting to online banking and mobile banking are two ways that you can do your part to bank green and help the environment. Green banking via your computer or cell phone includes setting up direct deposit to receive your paychecks, receiving electronic statements from your bank and paying bills online. All of these steps can drastically reduce the amount of paper produced by your bank. Online banking and mobile banking are also highly effective ways to keep track of your finances and to avoid late payment fees.

Another green banking step you can take is to suggest that the company you work for sign up for a product called "Remote Deposit". This service is offered by a growing number of banks to their commercial customers. Remote deposit is the digital scanning and processing of checks from your computer or smartphone. It is a convenient service without the paperwork and environmental costs associated with traditional branch deposits.

Many banks claim to be be eco-friendly, but in fact do little to support environment initiatives with the money you deposit with them. Ask your local bank exactly how they support the environment before assuming that their self-anointed "Green Bank" label is deserved. Chances are good that there is a bank in your local area that is more socially-conscious than their

competitors. If you open an account with that bank, then you are doing your part to support the environment.

Finally, the more people who actively search for and support eco-friendly banks, the more competition for deposits will increase. This will help raise the awareness for green banking. Keep track of the latest news on green banking on MoneyRates.

Finding a greener bank

MoneyRates is a good place to start your search for a greener bank. Many of the banks that post the highest CD rates are online-only banks or online divisions of FDIC-insured banks. Most of these banks offer the types of online and mobile banking services that are much more ecofriendly than traditional branch banking.

You should also check a bank's website to see if they have any sustainability or green policies that they have implemented internally. Most banks that have made a green commitment will have detailed highlights on their site of their latest eco-friendly developments.

Finally, you should do a little research to see if a bank is active in their local community or in national green initiatives. Green banks are sometimes very active in promoting and sponsoring environmental projects. You may find a green bank that shares the same interests as you.

If living green is important to you, where you bank should reflect that. The money that you keep on deposit can be used for useful green projects. Take the time to find a greener bank.

Some people do their banking online and some buy checks made from recycled paper. For most of us, the idea of green banking doesnt extend much beyond these things. Many people are looking for ways to paint Wall Street eco-greeninstead of dollar greenby investing in eco-friendly businesses. Its good to keep in mind that the choice of where to establish checking and savings accounts can also impact the environment and affect the sustainability of local communities

Green banking, socially responsible banking, community investment banking, and eco banking are all terms that mean

relatively the same thing: banks or financial institutions that incorporate an ecological outlook into their business model.

The Basics of Green Banking

In its simplest form, your bank uses the money you deposit into checking and savings accounts, or certificates of deposit (CDs) by making loans to businesses and to individuals for personal purchases such as cars and homes. The bank earns revenue from the interest it collects on the loans, investments it makes, and on fees it earns through various other services. Just as investors on Wall Street have traditionally been concerned only with the profitability and the returnor interest earned on an investment, traditional banks are concerned primarily with earning the highest interest (or profit) they can get without regard to the kinds of business the investments promote. There is evidence of a tidal wave of change as more and more banks align their investment decision-making with the triple bottom line: people, planet, profit.

Many banks are envisioning a bright future defined by ecological economics. While the staid old mega-banks are only now beginning to test the waters, some young upstart establishments are plunging in full force with a complete focus on social justice and environmental economics. They are insistent upon a green viewpoint, defining community banking in a whole new way that allows even their smallest depositors the opportunity to put their dollars to work for healthier communities and a healthier planet.

Green Community Banking: A Growing Trend

In 2001, a survey conducted by the Social Investing Forum revealed that community investing is the fastest-growing category of socially responsible investing in the U.S., increasing from $5.4 billion dollars in 1999 to $7.6 billion [in 2001]. In 2003, the Community Investing Campaigna joint effort between the Social Investing Forum Foundation and Co-Op America recognized 10 pioneering banks and other organizations for their investment strategies. Among the honorees

were Vermonts Chittenden Bank, Santa Fes Permaculture Credit Union, and ShoreBank Pacific (located in Washington and Oregon), whose green investments support such programs as:

forest preservation water production responsible farming practices recycling eco-tourism loans to displaced timber workers to help them start environmentally friendly businesses help for low-wage earners to purchase homes community education and mentoring programs

One honoree, ShoreBank, is so committed to advancing the environmental sustainability of any projects it supports that the bank employs a full time scientist who advises on energy use, water use, pollution, and natural resource conservation. Visit the Web sites of Co-op America, the Social Investment Forum, and Community Investing for more information about ecological economics and to find other eco-friendly financial institutions. .there are a number of ways that you can make even the smallest bank account work for you, the planet, and the sustainability of your own community.

Researching Your Options

While slow to enter the world of green banking, the larger banks are making progressmany have started solar lending

programs and other loan programs that allow borrowers to purchase products and services for greening their homes and businesses. Recently, Wells Fargo announced that their credit/debit rewards cards will allow cardholders to use their points to buy wind power to offset their personal carbon output. Every 5,000 points buys 6,000 kilowatt hours of wind power. The best way to find out about the possibilities in your area is to shop around with local banks. Make appointments to talk with loan officers and ask them about the banks policies for community investment and customer participation programs. You may be pleasantly surprised to learn that your small savings account has helped build solar-powered affordable housing in your own town or perhaps helped fund a micro-loan to a woman in a war-torn region, allowing her to buy a sewing machine and start a small business.

Going Local

If you prefer to do business closer to home, one way to green your own banking practices is to look to your local bank and encourage them to incorporate the triple bottom line for local sustainability. Get to know the people who work at your bank. Write a letter or make an appointment with the head of your bank or the branch where you do your personal banking and ask questions about:

the banks policy about recycling and paper use energy saving efforts or environmental improvements the bank has made to its buildings investment and loan policies what percentage of loans are awarded to environmentally focused companies or emerging technology future plans to do moreencourage your bank with your support and continued patronage

Also ask about special programs. In Santa Rosa, California several banks and local agencies developed a GELGreen Energy Loanprogram. Participants formed a consortium that includes the utility company, the water agency, the trash/recycling hauler, the local university and their environmental technology center, the Climate Protection Campaign, along with a locally owned home improvement center and four locally owned banks. Through this program:

loan applicants first apply for a loan with a GEL lender an independent analyst evaluates the home to identify the best options for energy savings and provides a prioritized list of upgrades the lender makes the loan to cover upgrade costs the local universitys environmental technology center monitors and confirms the post-upgrade savings

On a more personal level, you can ask if your bank offers:

checks printed on recycled paper online banking and account maintenance automatic check deposit online bill paying services

All of these practices help to reduce paper use, as well as fuel consumption, since records and money are exchanged digitally and are not sent by air and truck transport.

Wetlands Mitigation Banks

Contrary to what the name seems to imply, mitigation banks are not places that you can walk into, open a savings account, and expect that the banks loans and investments are put towards wetlands preservation!

It is common knowledge that any time a developer wants to build a commercial or residential project, an Environmental Impact Report is required. This report determines the extent of

environmental damage a given project will likely incur. Once the proposal is established, developers are usually given a choice as to how they will mitigate those negative effects on the environment. Mitigation banks were originally designed to be a third party option through which the developer pays mitigation fees and the bank takes on the implementation and ongoing oversight of the mitigation project. It is a huge benefit to the companies charged with the mitigation requirement:

the companies can turn over the process and the liability to an agency that is vastly more adept at successfully implementing the mitigation project wetlands, streams, and other restoration projects benefit because larger pools of money are available in a systematic and coordinated effort, rather than the piecemeal way of funding from past practices

For more information about mitigation banks, visit the EPAs Mitigation Banking Factsheet. While you probably wont be banking at a mitigation bank anytime soon(!), there are a number of ways that you can make even the smallest bank account work for you, the planet, and the sustainability of your own community. As weve seen, this can be accomplished whether you choose to work through your local bank in small ways, use a national bank that focuses only on sustainable investments, or do business with banks that invest in the worlds most underfunded individuals and communities. A wide range of opportunity awaits if youre interested in using your money to make significant positive impacts in your local community and the greater global community.
Source: Green Living Ideas (