Mighty Deposits Guide, 2023 Edition
Your choice of bank or credit union is one of the most socially and environmentally impactful decisions you can make with your money. When money is deposited in a bank, the bank can invest it in a variety of things — small businesses, solar farms, derivatives and securities, fossil fuel extraction, mortgages for veterans, you name it. It differs drastically depending on the bank.
Regardless of what you care about, the bank you choose ends up deciding what your money is used for. The relationship between deposits and loans is nuanced, but ultimately your deposits are helping support the overall business activities of the bank. As a consumer, if you want to have an active voice in this process, you can choose your bank intentionally and have some control over the trajectory of your money. The first step is learning how your bank uses your money.
Below is a breakdown of several ways to learn about where banks invest money in the U.S. There’s no single database that tells you the names of all the companies and people each bank invests in. This information isn’t public. In certain cases, you can see the names of some of a bank’s loan recipients, but often you can’t. One reason for this is consumer privacy. However, there are numerous data sources available to help you get a picture of what industries, companies, and locations your bank invests in.
LOOK UP YOUR BANK AND LEARN ABOUT ITS IMPACT
1. Data sources that are publicly available for all U.S. banks
Learn the types of loans your bank makes — like farm loans, small business loans, and mortgages — and the amounts. All banks are required quarterly to report their balance sheet to financial regulators, including how many loans they have made for small and large business, mortgages, farms, construction, auto loans, and more. A free tool has digested and analyzed this data for every bank in the U.S. — you can look up any bank and see what percentage of the bank’s money (assets) is invested in small business, farms, housing, and more. (Raw government data can be accessed here, but analysis is not provided.) The mix of a bank’s lending can be dependent on the bank’s mission and values, the health of the local economy, the expertise of the bank, and more. Limitations: Lending amounts are not broken down by location, race, gender, or other demographic data.
Learn how much your bank invests directly in communities. Because all banks are required to publicly report their balance sheet, it is possible to learn how much a bank is invested in real economy initiatives (like loans for business and housing) versus instruments that serve the financial economy. This tool, powered by public data, gives each bank a community financing score and a comparison to the bank industry average. Community financing has a direct, immediate impact on communities, and is equal to the sum of loans for business, housing, farms, households, and construction, plus local government loans and securities, as a percentage of total assets. In the tool linked above, anything that does not fit into the above definition of community financing is classified as something else. Something else includes investments in bank offices, other securities, derivatives, and any other assets not directly for community use. Limitations: Community financing data is not broken down by location.
2. Data sources that are publicly available for some U.S. banks
Learn the race, income, and location of people that were given (or denied) mortgages by a bank. Due to the Home Mortgage Disclosure Act (HMDA), some banks are required to report the demographic information of anyone that applies for a mortgage loan. A database, searchable by bank name, is available on the Consumer Financial Protection Bureau website. Limitations: Not all banks that make mortgages are required to disclose this information. Only banks that meet certain asset and lending thresholds are included in the HMDA database.
Learn which small businesses a bank has financed. Some banks make small business loans that are guaranteed by the Small Business Administration (SBA), a U.S. government agency. The SBA publishes a spreadsheet of small business loan data, including the names of recipients and the names of banks issuing the loans. Limitations: The data is not organized by bank, so visitors must filter the data themselves. The data doesn’t include all small business loans nor all banks, as some business loans are made without the guarantee of the SBA.
Learn which banks finance fossil fuels. All banks are not required to uniformly report the names of all businesses they finance, but some companies may publicize the names of banks they work with. The Rainforest Action Network (RAN) has taken an approach to uncovering fossil fuel financing data for 60 global banks that uses transaction data from 2,300 fossil fuel companies. If you bank with one of the largest banks in the country, RAN’s Climate Report Card may include data about your bank’s fossil fuel financing decisions. Limitations: This report is not an exhaustive list of all banks involved in financing the fossil fuel industry.
3. Data sources that are disclosed voluntarily by some U.S. banks
Learn which banks invest in low-income communities and communities of color. Some banks that focus on working in underserved communities choose to seek out certification as a Community Development Financial Institution (CDFI). If a bank is a CDFI, it targets 60% or more of its financing at low-and-moderate income communities and communities of color. This list shows all CDFI banks in the U.S. To look up if a bank is a CDFI, check here. Limitations: This is not an exhaustive list of banks that make loans to low-income communities or communities of color. Some banks that focus on working in underserved communities may not have sought out certification as a CDFI.
Learn which banks don’t finance fossil fuels. Many banks voluntarily state that they don’t finance fossil fuel companies. Some banks state this on their website, while other banks share this information with bank comparison sites like Mighty Deposits or through campaigns like Bank for Good. Over twenty credit unions and banks in the U.S. have stated that they don’t finance fossil fuels. Limitations: These are not exhaustive lists. Some institutions that don’t finance fossil fuels, like other community banks and credit unions, simply haven’t commented publicly on the topic. Additionally, these are voluntary public pledges, not government certifications.
Learn which businesses or organizations are funded by a bank. Some banks voluntarily disclose the names of customers that have received a loan from the bank, like this Ohio bank funding a co-op housing community or this bank in the Mississippi Delta funding mortgages for first-time homeowners. Banks can share these stories on their own websites or as a way of adding transparency to their Mighty Deposits bank profile. Browse the database to see banks that share stories of the real people behind the lending data. Limitations: Banks typically share a few customer stories, not a comprehensive list of all customers.
If you find the number of banking data sources overwhelming, a great starting point is looking up your bank in the Mighty Deposits public database. This is the most comprehensive U.S. source of information about where all banks and credit unions invest money; it combines government data into a few metrics for each bank, including information about community investment, fossil fuel financing, certifications like CDFIs, and customer stories. (For more detailed information, type your bank into the bank impact dashboard.)
GET STARTED LEARNING ABOUT YOUR BANK
Taking the time to check up on your bank can help ensure your banking isn’t unintentionally undermining your other efforts to make a positive impact, like your donations or activism.
If there’s a specific issue or community that you’d like your bank deposits to support (or not), start by asking your bank directly via email, phone, or social media.
Once you’ve had a chance to learn a bit about what your bank invests in, reflect on your own priorities. If you decide you want a new bank that aligns with your values, consider checking out the guides below to help you find an eco-friendly bank, a community-focused bank, or a socially responsible bank. Or, create a custom list of banks that match your values and needs using the bank database.
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