By Debbie Villarreal-Hadley, Montclair Climate Action member
Everyone is aware that by the ‘power of the purse’ we can express our ethical standards, but we also need to consider the power we are extending to others. I consider it my responsibility to ‘trade’ with entities that are doing good. I try very hard not to work for companies that do not act fairly and instead only with companies that show respect and compassion for their employees and the people to whom they supply goods and services. And I don’t want to be giving my money to bad actors – for instance – JP Morgan Chase who is the largest US provider of loans and other capital to dirty fossil fuel industries. Just last September CEO Jamie Dimon testified before a house committee that the bank would not refrain from new investments in major oil and gas projects, warning that the alternative would be “everyone going back to coal.” This from a man whom we are supposed to trust with our money? Well – not on my dime. I have begun moving my accounts away from Chase and I urge you to do so as well.
I started thinking about switching banks about a year ago when news was spread about Chase’s investments. On March 21, I joined Third Acts’s* National Day of Action to Stop Dirty Banking, protesting in front of my local Chase branch. Seeing no reception or response to public demonstration I resolved to switch. Then came the process of finding a new bank.
I’ll admit: changing banks is a chore few have on their list of things to do.
Searching‘”climate friendly banking” I quickly came upon the acronym ESG. For banks, this is a rating that measures the impact of investments and operations on the environment, society and corporate governance practices. But, and in the case of JP Morgan Chase, a relatively high score can be achieved by excelling in DEI employment, for example (thank you for that), which would offset the banks negative impact on the environment. To get beyond the rating I reached out to friends who are in the banking industry (you probably know a few as well) and asked what features, aside from ethical investing, they rate highly. Here’s what they said…
• Brick and mortar bank vs. all online. A bank with a physical location is better for many reasons. You can deposit cash. It’s more convenient for some who need personal service and support. They will probably still open if the internet is down?
• FDIC insured. The standard deposit insurance amount is $250,000 per depositor, per FDIC-insured bank, per ownership category
• Small banks can be more risky. There’s mountains of data here, some with contradictory information. But the failure of Silicon Valley Bank in 2023 along with 3 others is reason to be cautious for now.
• Banks that sit below the top 3 tiers (the large multinationals and nationals) usually do business with customers in their state and possibly adjacent banks
• If you have been using the many, convenient on-line options that the top tier banks offer you should also consider what bells and whistles you need for your new bank to provide
• Don’t expect to get the job done in a day… it’s a process that can be undertaken over time
So far I have moved a personal savings account from Chase to a New York State bank that advertises its commitment to the environment and investment in their community. Chase has yet to contact me to inquire about where I have gone. My next step is to open a personal checking account and ‘test drive’ their features. And if all goes well I’ll move my corporate accounts.
Wish me luck. Please join me in switching or write in protest to your bank. Individually our impact may be negligible, but together our insistence might sway the Goliath of the banking industry.
Other information and resources:
Image credit: David Korfhage, Montclair Climate Action