Are you thinking about breaking up with your mega-bank? By switching to a smaller, community bank or credit union, you are choosing to support the green economy by placing your money in the hands of ethical institutions. Joining a green bank is one of the biggest ways you can vote with your dollars, but it is also a major decision. Here are answers to some of the most frequently asked questions we receive when people shift to greener financing, with thanks to This! Is What We Did for answers to some questions.
Are accounts at smaller banks and credit unions safe?
Yes, your accounts at community investing banks and credit unions are insured up to $250,000 per depositor at any bank with FDIC insurance and any credit union with NCUA insurance.
Will switching to a new bank affect my credit rating?
In general, opening or closing bank accounts will not affect your credit rating because these institutions do not usually inquire into your credit history. You may want to verify this with the bank or credit union before opening a new account. Your credit score is based on a number of factors and it is very important to ensure that bills are paid on time, in full. If you are seeking a loan, ask what information will be used to determine your eligibility.
Do community development banks and credit unions pay a competitive rate of return?
Yes. Community development banks and credit unions pay a rate of return on savings accounts and certificates of deposit comparable with that of other banks and credit unions. They also provide better customer service and have lower fees.
What if a megabank holds my mortgage?
You may be able to refinance your mortgage with a community development bank or credit union. If a green bank or credit union is offering a lower interest rate than you are currently paying, this may make a lot of sense.
How do I avoid ATM fees when I bank with a small bank without many branches?
Many credit unions have reciprocal relationships where they will not charge each other’s customers ATM fees. You can also take out a week's worth of cash at your bank and supplement those withdrawals with cash back on debit card transactions from stores. Many pharmacies and grocery stores will let you receive $35-100 (or more) in cash back for free with each purchase.
I have an elite personal banking option with a climate-bad bank. Will I have more influence with that bank if I remain a customer than if I end my banking with it?
This is a personal judgement call. However, Green America and other coalition partners have been engaging with US megabanks for many years and have yet to see any meaningful change. At this point, we think the better strategy is to for people who care about sustainability and equity to end their relationship with a bank that is still plowing billions of dollars into oil, gas and coal. If you have a preferred relationship with a climate-bad bank, it would be helpful for you to seek a meeting with a bank branch manager to let them know why you are ending your relationship and encourage them to share that with their supervisors.
It feels like too much hassle to change to a new bank. I have too many auto-payments and auto-deposits.
Green America has created a lot of resources to help! While it can feel overwhelming to sift through the details, moving our money from climate-bad banks is both doable and is one of the most effective things we can do to fight climate change.
I’m getting frustrated trying to find a truly green bank or credit union. I’ve done all this research into new institutions, only to find that they’re all somehow tied to fossil fuels. What do I do?
It is frustrating to do so much work to identify a green bank or credit union, only to find your prospective new account may be connected to the fossil fuel industry. For example, many green banks and credit unions offer credit cards issued by Elan Financial, which is owed by US Bank, one of the megabanks with considerable investments in oil, gas, and coal. The fossil fuel industry is powerful, and it’s going to take a large, coordinated effort to break that power. That's why we believe it's important to focus our efforts on pressuring the largest US funders of climate chaos. If even one of these bigger banks changes their act, there will be ripple effects throughout the entire global financial sector. And substantial progress in this area IS happening! HSBC, the largest bank in Europe by total assets and the 13th largest funder of fossil fuels worldwide, recently committed to not funding any new oil and gas projects. The pressure is starting to mount on these massive institutions, thanks to the persistent and coordinated efforts of folks like you!
For additional information regarding banking with community development banks and credit unions, turn to our Community Investing Guide.
Green financing is our way to an ethical, green economy, and it starts with you! Break up with your megabank and switch to a green bank today.
Need more help? This! Is What We Did offers Move Your Money Office Hours. Trained peer facilitators have daily 30-minute sessions that you can sign up for to ask questions and get personalized assistance in switching to a new bank or credit card. Sign up for a time here.
