Bringing Socially Responsible Banking to Your Wallet

by Ellie Kahn, senior at NYU

Most of us make daily purchasing decisions based on our ethics. We buy local, organic, grass-fed, recycled, biodegradable, fair trade —and the list goes on. But one major financial decision that gets overlooked is banking. We sign up with whatever bank happens to come on campus, in the hope that our university has invited them there, and would not lead us astray. Sometimes you even get a free tote bag and lots of pens. But as students demanding socially responsible investment from our universities, what decisions are we making in our daily life to support this goal? How can we ask our university to invest responsibly if we are not doing so ourselves?
Why are banks interested in our money? Students generally have lots and lots of debt, and that they generally pay it back with interest. Similarly our college degrees mean we're more likely to get fancy jobs, a fancy mortgage and then produce more kids who will go to college and repeat the cycle. While our $150 in the bank may pale in comparison to the billions of dollars of university endowment money, our say actually matters to commercial banks. For us, it makes a much smaller impact than the consumer choices we already make.

So what choices do we have? Fortunately there are many banks out there with ethical policies. Many smaller banks have mission statements directly impacting the local community, especially community banks and community investment credit unions. They're perfectly safe and have the added benefit of being locally owned and operated rather than being controlled by global shareholders far removed from the community’s economy.

Just before the financial crisis hit, I decided to help students in New York become aware of the importance of their personal banking and possible solutions to banking problems. I had a Bank of America card weighing down my wallet, so I decided to start there. I did some research about Bank of America's practices and where it invested its money, or rather MY money. I discovered there was a national campaign against Bank of America and Citigroup based on their financing of coal, from the destructive mountaintop removal mining, to the construction and maintenance of new coal plants. The environment is a passionate subject for many students these days, so I figured I'd center my campaign on this issue. I also received support from the Rainforest Action Network and Greenpeace who were already involved in this struggle. Then the financial crisis occurred, which made it all the easier to show the big commercial banks are not investing our money responsibly.

I had done my research on the negatives of commercial banking, but was left with the question: where CAN I bank? Through the help of REC I managed to get in touch with The National Federation of Community Development Credit Unions [NFCDCU], and thus found one near my university, NYU. I walked into the Lower East Side People's Federal Credit Union, to wait in line amongst a diverse group of locals. I had a lovely conversation with a banker there, who was so excited about the prospects that she offered to come on campus virtually whenever I wanted. I signed up for an account on the spot. We set a date, reserved a table in the lobby of our student center, and set to work creating an event where students could sign up on the spot. Then I promoted it by going to every environmental, social justice and community group on campus.

Unfortunately there is a lot of financial illiteracy, even amongst college students, so we prepared information to help educate people. We called out "Green Your Greenbacks" and other fun slogans and handed out flyers.  A few people signed up for bank accounts and many more stopped to ask questions, a huge feat in New York, where people always gaze disinterestedly at the ground and steamroll through crowds. Overall I'd say the event was a great success. At the end of the event, the people from the credit union gave me a big hug and invited me to come back and help them in the future. I think that when I hold the event again next semester more  students will be ready to sign up to invest responsibly.

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