Ethical banking enables you to put your money where your values are. Discover a list of the best ethical banks you can bank with to make an impact.
What is Ethical Banking?
Ethical banking may sound like an oxymoron given the reputation of bankers in the public eye, but it is possible to bank with a financial institution that shares your values.
An ethical bank, also known as a sustainable or socially responsible bank, is a lender that takes social and environmental impact into account when making lending and investment decisions.
That doesn’t mean, though, that ethical banks don’t seek to maximize profit. They do! But in a way that doesn’t sacrifice their principles or creates a negative impact on society or the environment.
What’s more, being a socially responsible bank is not just a moniker that any bank can wear. To be recognized as a socially responsible lender, an aspiring ethical bank should be B Corp certified.
A Certified B Corporation balances purpose and profit and is “legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment.”
To qualify for certified B Corp status, financial services companies have to undergo a rigorous certification process that ensures that the company focuses on people, the plant, and profits – and not just the latter.
Most ethical banks are also Community Development Financial Institutions (CDFI). CDFIs provide financial services to underserved communities.
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Ethical Issues in Banking
Banking itself is not an unethical practice.
Paying depositors interest on their funds and granting loans to individuals and businesses to create economic prosperity is the fundamental purpose of a bank.
Ethical issues arise, however, when banks are providing their services to industries and companies that cause harm to others or the environment.
Banking institutions that lend money to fracking businesses, arms manufacturers, tobacco companies, and fossil fuel corporations are arguably harming society and the earth more than helping it.
Banks that deal with businesses in these industries are, therefore, not considered ethical or socially responsible, even if they have corporate social responsibility (CSR) campaigns in place.
Unfortunately, many financial institutions have proven to us that CSR campaigns are more about getting good publicity than making real impact.
Why Bank With an Ethical Bank?
If you feel strongly about making a positive impact in the world, then why not choose a bank that strives to do the same?
Whether you are an environmental activist, an advocate for social justice, or someone who wants to make a small but meaningful difference, you can choose a banking provider that is aligned with your values.
Ethical banks range from “green banks” that focus their lending activities on green businesses to lenders that primarily support low-income communities or financial institutions that target nonprofits as their core customer base.
Whatever your values are, chances are that you will find a bank that shares them.
Aspiration: A Pioneer in Ethical Banking
A prime example of a socially responsible bank is California-based Aspiration.
Aspiration is a sustainable, ethical, and socially conscious bank that offers a range of financial services, including branchless banking and savings products.
The fintech company commits ten cents of every dollar to charities involved in expanding economic prosperity and makes it easy for users to donate to charitable causes directly from their checking account.
Additionally, Aspiration plants a tree every time a customer makes a purchase and rounds up their purchases to their nearest dollar, and provides carbon offsets for all gas purchases with Planet Protection.
Best Ethical Banks in the US
There are numerous ethical banks that environmentally and socially responsible consumers can choose from. Below, you will find a list of the top ethical banks in the US.
| Bank | Description | Headquarters |
|---|---|---|
| Aspiration | Aspiration is a digital-only green bank that lets individuals spend, save, and invest with a conscience. | California |
| Amalgamated Bank | Amalgamated Bank is America’s largest union-owned socially responsible bank that provides accessible banking services and advocates for worker’s rights and high standards of corporate governance. | New York |
| Beneficial State Bank | Beneficial State Bank is a community development bank that offers banking services to underserved SMEs, non profits, affordable-housing developers, and community facilities. | California |
| City First Bank | City First Bank is a community development bank that provides financial services to underserved communities in Washington, DC. | Washington, DC |
| Mascoma Bank | Mascoma Bank is an environmentally and socially conscious community bank that invests in green initiatives and donates to philanthropic ventures. | New Hampshire |
| Spring Bank | Spring Bank is a community development bank that primarily services low-income earners and small businesses with the aim to create positive social change. | New York |
| Sunrise Banks | Sunrise Banks is a socially responsible bank that provides affordable financial services and donates a percentage of its profits to social impact initiatives. | Minnesota |
Now, let’s take a closer look at each of these banks.
Aspiration
- Certifications: Certified B Corp
- Services: Personal banking, savings products
California-based Aspiration is a digital bank that offers personal banking services and savings products for socially conscious individuals. The green bank’s motto is “Do Well. Do Good.” And that’s exactly what the fintech company does with features such as planting a tree with each roundup transaction and providing a debit card made of recyclable plastic.
As a digital-only bank, Aspiration serves customers in all 50 states. To learn more about Aspiration, click here.
Amalgamated Bank
- Certifications: Certified B Corp
- Services: Personal banking, small business banking, commercial banking, investment advisory
New York-based Amalgamated Bank is the largest union-owned bank in the US and the first to go public. The socially responsible lender provides accessible and affordable banking service to its customer base, which includes labor unions and non profit organizations. What’s more, Amalgamated Bank’s workforce is composed of over 60% women or people of color.
Amalgamated Bank operates nationwide but has physical branches in California, New York, and Washington, DC.
Beneficial State Bank
- Certifications: Certified B Corp, CDFI
- Services: Personal banking, small business banking, business banking for non profits
California-based Beneficial State Bank is a socially responsible community bank that provides business banking services to SMEs, nonprofits, and community-focused organizations that are underserved by large financial institutions. The community development bank also provides banking services to individuals and families, and reinvests a share of its earnings back into the communities it serves.
City First Bank
- Certifications: Certified B Corp, CDFI
- Services: Personal banking, small business banking, business banking for non profits
Washington, DC-based City First Bank is an impact-driven community development bank that serves low and moderate-income individuals and families in the nation’s capital. Additionally, the community lender provides business banking services to underserved small and medium-sized businesses.
City First Bank serves customers in Washington, DC, and surrounding areas.
Mascoma Bank
- Certifications: Certified B Corp
- Services: Personal banking, small business banking
New Hampshire-based Mascoma Bank is a socially responsible lender that is committed to being a force for positive change. The B Corp certified lender donates 10% of its earnings to charitable organizations and ensures that at least 50% of its board members are female.
Mascoma Bank serves customers in New Hampshire, Maine, and Vermont.
Spring Bank
- Certifications: Certified B Corp, CDFI
- Services: Personal banking, small business banking
New York-based Spring Bank is a B Corp certified community development bank that provides personal and business banking services to low and moderate-income communities. The green bank also offers high-yielding savings products and boasts no-fee ATMs.
Sunrise Banks serves customers in the Minneapolis–Saint Paul area.
Sunrise Banks
- Certifications: Certified B Corp, CDFI
- Services: Personal banking, small business banking
Twin Cities-based Sunrise Banks is a socially conscious community bank focused on creating financial empowerment for all. The ethical lender offers financially inclusive products to individuals and businesses and donates a share of its profits to charitable causes.
Sunrise Banks serves customers in the Minneapolis–Saint Paul area.
