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Jun 15, 2020
Personal Finance

How Intentional Banking Can Build a Better Tomorrow

Though banking might not be front of mind when it comes to contributing to climate solutions and environmental justice, intentional banking is one of the easiest and most effective ways each of us can quickly create positive impact. It isn’t sexy, but it’s the truth.

Banks perform a crucial role in the economy by acting as gatekeepers for the flow of capital. Stated another way, banks aggregate money from across a population of depositors and lend that money to companies and individuals they deem a “good credit risk”. It is the original form of crowd sourcing, and that access to affordable capital has immediate and long-term repercussions on the climate, our communities and the goods and services we consume. That capital determines who can own a house, buy a car, start a business, as well as who builds that house, manufacturers that car, and patronizes that business. That capital determines how many mines are excavated for coal or how many trees are harvested for palm oil.

To our detriment, the credit and risk/return analyses employed by many of the incumbent banks in the U.S. have not changed much in recent decades. The same credit and risk/return decisioning that discounted long-term issues of climate, social and environmental justice at the expense of short-term shareholder profit remain firmly rooted in place.

Laws like the Community Reinvestment Act (1977) in the U.S. that require our country’s largest banks to reinvest in their local communities, including LMI neighborhoods, were created because these banks were failing to perform the functions on their own. The wealth and income disparities currently witnessed in our country and the climate emergency we all find ourselves in highlight just how far we have to go to address today’s most pressing issues. Meanwhile, most banks are still stubbornly entrenched in a 20th century value system, supercharged by a 21st century marketing effort. We deserve more, as do future generations.

Using a bank that aligns with your personal value system ensures that your deposits are going towards building the tomorrow you want to live in. Our deposits and the companies, individuals and projects those loans are supporting are an extension of each of us, a vote towards building that better tomorrow.

Community banks redeploy customers’deposits into their local economies while CDFIs redeploy capital to help low-income, low-wealth, and other disadvantaged people and communities join the economic mainstream. Atmos is concentrated on the climate by redeploying deposits strategically to transition our economy off fossil fuels and doing so in a manner that includes frontline communities.

Regardless of the value-set that speaks to you most powerfully, it’s important to look beyond the slogans and marketing campaigns to understand what your bank is actually funding with your deposits. It might surprise you.

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