Is this the year that you make a New Year’s resolution to stop funding the climate crisis through your bank and then actually do it? It is for me.
In the interest of full transparency, I got a head start on my 2020 New Year’s resolution because I have already started the process of breaking up with my bank. They just don’t know it yet.
Technically, it is not just my bank because my spouse and I have joint accounts. Fortunately, my spouse is amenable to changing banks.
Yes, I am one of those people who enjoy making and accomplishing a New Year’s resolution. Most years I write a New Year’s resolution post in hopes of luring more readers into the process. Completing something you set out to do can make you feel empowered.
One year I wrote about green investing and another year I wrote about restarting a previous resolution. Last year my New Year’s resolution was to research and write about the environmental impact of sugar and determine if I wanted to do anything about my own sugar intake (I did).
This year my New Year’s resolution is to sever all ties with our current bank and put our money in a credit union where it can benefit our local community.
In this post, we will take a brief look at how “too big to fail” banks are funding the climate crisis and I will share my banking transition experience so far. Admittedly the process has not been hassle-free but I believe ditching our old bank will be worth it in the long run.
Is Your Bank Funding the Climate Crisis?
A bank is supposed to be a safe place where you deposit your paycheck so you can access your money 24/7/365 to fund your life. Banks offer loans so that you can buy a car or house, pay for things with a credit card, or run your business. Savings accounts and certificates of deposits enable to you make a bit of interest on the money you set aside for the future.
Banks provide valuable and essential services, right? Yes, they do.
However, there is a dark side, too.
What came to mind when you read that sentence? Did you think about the 2008 financial crisis and how it impacted you personally? Were you reminded of news reports about your bank engaging in unethical and perhaps even criminal behavior? Did your student loan balance flash before your eyes?
If offshore oil drilling platforms, natural gas pipelines, and coal mines did not immediately come to mind, then you are probably in the majority. A few years ago, these images would not have popped into my mind either. But now they do.
Keeping our money “safe” in a bank that is funding the climate crisis and endangering our children does not make sense to me. So, I decided to do something about it.
Bank Transition Game Plan
I am a planful kind of gal so I did some research and planning before we began our bank changeover. If you are interested, click here for a checklist that may help you with your own bank transition. Below are some of the major steps.
Think It Through
I take banking seriously and I am not advocating that you or anyone else change banks unless you want to and doing so fits in your life. I am sharing what we are doing to provide an example. Where you put your money is of course completely up to you. If you have joint accounts with one or more people, you need to get their buy-in upfront.
My unease with our bank began with learning about their unscrupulous business practices which we won’t go into here. I wanted to move to another bank but our financial life was heavily entangled with our current bank. So I did what anyone might do when faced with a daunting task, I did nothing.
What made me finally decide to spearhead our bank transition project?
Believe it or not, it was realizing that our money could be helping people and businesses in our own community if we moved it to a regional bank or credit union.
Do Your Homework
Do some research before you rush to open an account at the bank across the street from where you work or the credit union next to your grocery market.
Research activities include asking friends or coworkers where they bank, looking up financial institutions online and checking out their websites, and talking with the new account representatives for your top candidates.
We had decided we wanted to put our money in a regional bank or credit union so that is where I focused my online research. I narrowed it down to a few financial institutions and then I visited their branches to talk with the people in new accounts. I asked them about their services, fees, ATM network, who they loan money to, and how they support the local community.
My spouse agreed to go with the credit union that I felt would best meet our needs. One of the things I like about credit unions is that they are nonprofits owned by their members so there are no shareholders looking to make money off of using our money.
The time required to set up new accounts will be somewhat proportional to how many accounts you have at your old bank and how many new accounts you want to set up. If you have a credit card account and/or use online bill pay, the overall process will be more complex.
At our old bank, we have checking, money market, and savings accounts. We also have a Visa credit card account and I use online bill pay almost exclusively to pay bills and transfer money. Most of our bills are available directly through the online bill pay portal so unraveling this was one of the reasons I had delayed changing banks.
To get started we went to the credit union’s main branch and met with a member services representative.
We had filled out a small stack of forms at home. At the credit union, the member services rep asked a few more questions and then entered all the information into the credit union system while we waited. The rep was friendly and nice but this process was still mind-numbingly boring and more time consuming than I had anticipated.
We paid $5 to become members of the credit union and opened a share account (savings) and a checking account with minimal amounts.
I selected the most basic and inexpensive checks. Unfortunately, when the checks came in the mail, our name was spelled wrong. So we had to go back and repeat some of the previous steps. The credit union sent replacement checks at no charge.
Our new ATM/debit cards came in the mail but activating them required speaking with a member services rep at the call center.
Go at Your Own Pace
Once you have set up an account(s) with your new financial institution, you can decide whether you want to go close out your old account(s) immediately or do it in multiple steps.
I decided to take a phased approach for several reasons.
- My spouse just turned in a direct deposit change form so I am waiting for the first paycheck to arrive in our checking account at the credit union.
- Applying for a new Visa card is a separate process that we have not done yet.
- Stopping online bill pay at the old bank and starting it at the credit union needs to be done carefully because I do not want to end up with unpaid bills or late fees. So far I have set up an online account.
Will it take me a month or several months to complete all the tasks on my checklist? I do not know but I am looking forward to the day I can walk into our old bank, close all of our accounts, and walk out with a cashier’s check. I also intend to send a letter to the CEO of the bank explaining why we are no longer customers.
So what do you think? Are you ready to break up with your bank? If you are, thank you. Soon you will no longer be part of the climate crisis funding machine. My children, your children, and everyone else’s children are relying on us to do whatever is necessary to keep Earth beautiful and habitable now and in the future.
If you do not want to change banks or are not ready to do it yet, that is okay. Check out the resources section below for other New Year’s resolution ideas or come up with your own.
Happy New Year!
06/03/20 Update: We have completed breaking up with our bank. Click here to read the letter I sent to the CEO of Wells Fargo.
Featured Image at Top: A tiny black oil drum sits on top of a bank credit card – photo credit iStock/porcorex.
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New Year’s Resolution Posts
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- 10 Green New Year’s Resolutions for 2013
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- A New Take on the Top 10 New Year’s Resolutions for 2014
- Green Investing – New Year’s Resolution
- Green Twist on 10 Healthy Eating New Year’s Resolutions
- New Year’s Resolution for 2017 – Hit the Reset Button
- New Year’s Resolution – Make it SMARTER
- Alaska Natives Demanded Goldman Sachs Not Fund Arctic Drilling—And It Listened – by Yessenia Funes, Gizmodo, 12/16/19
- Banking on Climate Change: Fossil Fuel Finance Report Card – Rainforest Action Network, 03/20/19
- Bank Regulators Present a Dire Warning of Financial Risks From Climate Change – by Christopher Flavelle, The New York Times, 10/17/19
- Banks worth $47 trillion adopt new U.N.-backed climate principles – by Matthew Green, Reuters, 09/22/19
- Community Development Innovation Review: Strategies to Address Climate Change Risk in Low- and Moderate-Income Communities – Federal Reserve Bank of San Francisco, Volume 14, Issue 1, 2019
- Credit Unions vs. Banks: What’s the Difference? – by Anne Sraders, The Street, 06/19/18
- Demonstrators March From Palo Alto to S.F. to Protest Wells Fargo’s Fossil Fuel Investments – by Caroline Champlin, KQED, 03/17/19
- How a brief socialist takeover in North Dakota gave residents a public bank – by Will Peischel, Vox, 10/01/19
- Hundreds Protest Against Wells Fargo and Chase Bank Fossil Fuel Investment – by Mrinal Gokhale, Milwaukee Courier, 12/14/19
- It’s Not Easy Being Green—The Future of Fossil Fuels – Wells Fargo Investment Institute, 08/01/19
- Money is the Oxygen on Which the Fire of Global Warming Burns – by Bill McKibben, The New Yorker, 09/17/19
- #Sludge Report: Wells Fargo & Other Climate Destroying Banks – by Steve Hanley, CleanTechnica, 10/11/19