When you open a bank account, how do you choose what bank to use? Maybe it’s the one with ATMs close by, or the one your family used. Maybe they offered you a good deal on a product, or maybe it was just random.
Not all banks are created equal. Whichever bank you use, your money will be there when you want it. But while it’s in your account, the bank can use your money how it wants, which could be aligned with your values, or not.You can put your money to good use simply by doing your banking with a community development bank or credit union, which can meet all your normal banking needs.
Community development banks and credit unions operate just like big banks (think national banks with ATMs in every city), but these institutions focus on funding economic development in low- and moderate-income areas and/or supporting local economies, instead of simply investing to make their executives wealthier.
Why mega banks are bad news:
- They may invest your money in industries you don't support, like fossil fuel projects, military development, or abusive sweatshops.
- Mega-banks lent billions in predatory sub-prime mortgages that their borrowers couldn’t repay, which lead to the housing market crash in 2008.
- Their main objective is to make their executives wealthier, no matter who or what it harms.
- They don't treat people right. There have been thousands of complaints per year against mega-banks for bad credit card practices, scams, and fees.
- Mega-banks have been required to repay hundreds of millions of dollars wrongfully taken from consumers.
It can feel terrible when it seems like a bank only wants you for your money, charging fees or trying to upsell you on expensive products you don’t need.
Benefits of switching banks:
- Banks and credit unions dedicated to community development help create good local jobs.
- They may support clean energy, fair labor, and food security in food deserts.
- They provide financial services to low-income individuals and/or supply capital for small businesses, affordable housing, and education facilities.
- They invest in their local economy.
- They have more accountability to individual customer members.