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Conscious and Alternative Banking: Increasing your Stock in Social Movements

posted Dec 16, 2016, 8:53 AM by Rahni Jere Sumler   [ updated Dec 27, 2016, 2:34 PM ]

Do you know how your banks make money? More importantly, do you know how your bank is contributing to society?

Many don't what banks do to make their income. Even less know what banks use that money for, which is the most important in influencing social movements.

Banks' income is dependant on two different sorts of services. For this explanation, lets describe them as common and exclusive. 

Stand with Standing Rock Dakota Access Pipeline Protestor holding a no blood for oil sign

By Pax Ahimsa Gethen (Own work) [CC BY-SA 4.0 (], via Wikimedia Commons

Banking with Alternative Banks
Zipcode: 10027

Community DIary by Rahni S.

With common sources of income, banks provide services for the public in the consumer market. They open accounts, distribute loans that accrue interest, but the majority of the funds come from fees that they charge to do business. Consumers' accounts are directly debited monthly and businesses are charged for the cards that they run, often 75 cents per transaction.

With exclusive sources of income, banks make income by charging for use of capital by corporations and businesses. It's similar to the common market, opening markets, distributing loans, and fees for business. 

Most of these fees can be written off in taxes by corporations as a cost to do business, which is one way the government invests in the economy.
The problem arises when banks profit from providing capital to problematically lucrative industries. One example, according to investigations by the Center of Public Integrity, is Bank of America obtaining exclusive government contracts to provide very costly services to inmates in prison. 
Similarly, finding alternative banks can seem challenging and even impossible in some corners of the country. For myself caring for family members in a small town in the rural south, local banking services are mainly provided by megabanks that can afford to open branches in these small towns.

This means that many people are forced to provide capital towards movements like for profit prisons and the dakota access pipeline.

In addition to local small banks, as an alternative there are local credit unions and online banking.

Credit Unions community "microbanks" whose stakeholders are the community. They are similar to local small banks but they are usually geared towards a specific community such as a church.  They are different from megabanks because the percentage of stakeholders is heavily skewed toward the community. However, both local small banks and credit unions can have limiting services for people who travel. As a more flexible alternative, there are online banks. 

For more social conscious alternatives, the advent of technology has made online banking far more accessible. Online banks also offer more convenient services through apps, cheaper fees, and no fee ATMs.

One is Aspiration, a socially conscious bank who actively invests in other conscious industries combating things like global warming and supporting small businesses in all corners of the nation. They offer voluntary fees for supporting the bank, making most of their money through investments and the cost of business.

Another socially conscious alternative is to consider banking within community movements. For example, for the Black Lives Matter movement a conscious decision would be banking with a black owned bank. I am currently banking with Carver Federal Saving Bank, which has been serving NYC since the 1940s. As of this writing, Carver is less than 2% of shares owned by a myriad of banks including Citigroup, another megabank. This long standing black bank is on it's way of increasing shares owned by the community through a community buy out. In the meantime they provide banking services to many black owned businesses while employing many black and brown professionals in their branches. While Carver Bank has many services available in New York City, they don't have national banking services yet.

For a black owned online bank, there is One United Bank, opened in the 1980s. They have extensive online banking services, the largest in the community to date.