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Why You Should Switch to a Socially Responsible Bank and How To Do It

You have beliefs and values that guide your behavior and help you make decisions about how you live your life. As a consumer, you may choose not to give your financial support to companies and organizations whose values do not reflect your own or who support political candidates and causes that are counter to your beliefs.

However, based on where you do your banking, you could be supporting businesses, candidates, corporate practices, and causes with which you do not agree without even realizing that it is happening. The bigger the bank you use, the more likely that your money is going to ethically questionable beneficiaries without your knowledge or consent. Fortunately, there are also financial institutions available, offering ethically responsible alternatives.

How Banks Use Money

When you deposit money into a checking or savings account, it does not just sit there waiting for you to use it. Rather, the bank regards your cash as loan money that it then uses for investment. That is partly how banks make a profit.

Even though it is your money that the bank is using, it does not give you a say in what investments it makes. Sometimes banks invest in worthy endeavors, such as renewable energy initiatives and charitable causes. However, commercial banks also donate tens of millions of dollars to political candidates in every election cycle. They have also been known to support the gun lobby and fossil fuel industry.

How You Can Recognize a Socially Responsible Bank

In the past, there was little you could do to prevent your bank from investing your money in ways you did not support other than going completely off the grid. Now, however, there are banking companies in the United States who believe that a financial institution should reflect clients’ personal values as a part of its role as a guardian of its customers’ dollars.

Right now, there are only a handful of such banks across the country, although as customer demand for ethically responsible banking increases, that number could well grow. You are looking specifically for banks that are either members of the Global Alliance for Banking on Values, a worldwide independent network consisting of approximately 50 institutions, or a certified B-Corporation. This is a for-profit business that pledges to conduct its operations according to standards of environmental and social principles. Aspiration is an example of a Certified B corporation.

How You Can Divest From Your Old Bank

Though you may be eager to make a change for the better, this process is best accomplished step by step. Do not close an old account before you open a new one. If you send or receive automatic payments, make arrangements to switch these over to a new account. Give all parties involved, including yourself, time to adjust to the change. The entire process should only take about a month.

In your laudable global concern, make sure that you are also looking after your own interests. Before you get too excited about opening an account at a new, socially responsible bank, make sure to check that it affords you and your money sufficient protection in the form of FDIC insurance.

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