My Once-Dear Bank,
We’ve been through so much together. For decades you have been my steadfast companion: steady, quiet as I raged through the fires of youth. We bounced across the country; we traveled the world. You, stoically receiving my deposits. Me, spending too much on … what the hell did I even buy? No matter. Your gentle admonishments and reluctant (snort) overdraft charges kept me from sinking too low. I will always remember your ATM fees and online banking timeouts.
This period of our lives is over. I’ve learned that you were untrue to me. Please take your card and leave.
Or something like that.
For most of us, banks are like big digital drawers: We put our money in them so we don’t lose it. We take out what we need when we need it. Sometimes we open the drawer to peek, hoping that everything is as we left it. Often there is less than we remembered, and that is sad because who wants to choose between ice cream and beer.
But unlike an actual drawer, your dollars don’t just sit idle. Instead, it’s kind of like a money version of Toy Story: When you look away, your cash lives a whole other life. Yet that alternate existence has very visible consequences that could be way worse than screwing up Andy’s birthday party.
Some of your cash gets loaned to other customers, so they can buy things like houses and cars or start small businesses; but banks also put money to work on a larger scale to earn returns for their institutional clients—big companies like Google or Apple, who store billions in banks’ virtual drawers and expect more than the puny fraction of a percent we earn off our savings accounts. In the case of Citi, Chase, Wells Fargo, and Bank of America, they earn those big returns by funding a metric assload of fossil fuel expansion. It’s more like Toy Story meets There Will Be Blood.
Bill McKibben wrote a fantastic piece for The New Yorker about this. It outlines the impact Big Tech, which prides itself on being green, could have if it pressured its banking partners to stop funneling money at Big Oil. He based a lot of his reporting on a new report from the nonprofit BankFWD, which might as well have been written by George R.R. Martin. Here’s a sunny moment:
Since 2015, JPMorgan Chase, Citi, Wells Fargo, and Bank of America have invested $1.2 trillion in the fossil fuel industry, making them the four largest investors in fossil fuels during this period.
Yikes.
We’ve talked about this issue before, but the new details in this report highlight how obscene these banks’ practices are. They fund pipelines, bankroll fracking operations, and finance oil leases in pristine wildernesses. Both the fossil fuel and banking industries are making record profits off these activities, and you can tell them to stop. If you’ve entrusted your money to a large retail bank, now is a fantastic time to deposit it somewhere else and close your account.
This is not a pointless protest. If a thousand of us take a thousand dollars out of big banks, that’s a million bucks they no longer have access to. If a million of us take a thousand dollars out, that’s a billion. These numbers get really big, really quickly. We consumers have power, and we should all be flexing it in service of our planet. It’s not a far-off fantasy that our financial institutions will consider investing differently if enough of us leave—as long as we tell them why we’re leaving. We’ll get to that part in a minute.
Changing your entire financial picture probably sounds daunting. I know because I just did it; and I started that process with a deep breath and a muttered “here we go.” It was actually pretty easy, but it’s going to be even easier for you, because I made the phone calls and consulted the experts, and now I’m going to walk you through the whole process. I’m about to give you a step-by-step guide to moving your money, and arm you with questions to ask your next bank. And you are about to share this email with everyone you know, because the more people we get to make this move, the more impact we’ll have.
Step1: Find a bank
Choosing a bank is a big decision, so budget a little time for this.
Practical considerations first:
How do you use money? Do you use ATMs a lot? You’ll need to find a spot to park your cash that won’t charge you every time you take it out for a joyride. Do you need access to a local branch, presumably so you can steal pens and indulge in the occasional free mint?
You may have local options in your area, and, if so, a neighborhood bank or credit union can be pretty great. Many compete for your business with low fees, and generally invest their deposits in community projects. Their staff do weird things like pick up the phone when you call. If you need to take out a mortgage to buy or build a home, their rates often beat the large national players, and their local expertise can be genuinely useful.
Next up, the background check:
When I used to work with other humans, I often urged them to pick up the phone instead of relying on email replies to important questions. This is the journalist’s power move, and there’s no reason you can’t do it, too; it’s how I got to know our new bank. I called and asked them what they do with the money people give them.
The first person I spoke with didn’t know the answer. But an hour later, I got a call from the bank’s CFO. (Small towns are awesome.) He walked me through a shareholder report that outlined exactly how they put their deposits to work. No pipelines or fracking fields in sight—just farms, local businesses, and mortgages in my community. Sold.
What questions should you ask? Great question. I called our one5c regular Vanessa Fajans-Turner, executive director of BankFWD, for a little help with this. She’s one of the people behind the new report I mentioned above 👆, and she recommends starting your conversation with a rocket.
“Come right out and state your objective,” she says. “Say, ‘I am looking for a bank that doesn’t lend to fossil fuels. I am looking for a bank that is on the record having climate objectives as part of their corporate responsibilities.’”
Then you get specific, and make sure you don’t start with softball questions. “Ask the hard stuff first, because people will take all your time telling you what they do right,” she says.
First question: Do you provide any financing to fossil fuel companies?
This may be hard for them to answer, because “any” is a potent word. The bank may not underwrite a coal-fired power plant’s expansion loan, but it might hold the mortgage on the gas station next door. And while that station may say Shell on it, your bank might consider it a local small business. You might feel that way too and not mind—or you might walk away. (For what it’s worth, I’d probably be OK with it; in my area, gas stations have a vital community purpose and will have a role to play in the coming clean energy transition.)
If that’s a demerit but not a DQ in your mind, dig a little deeper. Ask what other, if any, financing they provide to fossil fuel or “energy” (greenwash alert) companies. Local banks will probably tell you something like “all of our deposits are used to fund lending in our community,” which sounds great. But if you know of local energy projects like pipelines or fracking operations, ask specifically if the bank is involved with the project or its contractors.
Your bank may also invest in the market, and it’s fair to ask if they own fossil fuel (or energy) stocks. It’s not likely that they hold individual assets, but, if they do and those assets are big petrochemical companies, I’d walk. If they’re in large funds like the rest of us and that fund has a little ExxonMobil in the mix, I’d give an otherwise good bank a pass.
If you’re satisfied that your bank isn’t the fake wizard behind the curtain at the fracking fields, you can start to ask about more consumer-oriented stuff.
Do they have special financing for clean energy home improvements like solar or wind power?
Do they have special EV loans?
Having products like these shows that your bank is thinking about its role in curbing fossil fuel use.
Then, ask if they have a plan to be operationally net zero themselves. This will probably be the easiest question, because it involves ground-level changes like switching to renewable energy and reducing business travel. It’s table-stakes stuff, but if they’re not doing it, it’s not a good sign.
If your best option is a national bank where it’s harder to get a person on the phone, look for something like a “shareholder relations” tab on its website. That’s where you can usually find reports that break down how the bank invests its deposits. An easier route might be to consult the Rainforest Action Network’s 2022 fossil fuel finance report. If the institution you’re looking at is even on their list (pages 8-11), it’s probably a good idea to look elsewhere. Bank.green also lets you look most places up. Here’s what it has to say about Wells Fargo:
I don’t endorse any bank—I don’t even endorse money; burn the global financial system down and try again with equality as a founding principle—but, as national institutions go, I have read and heard decent things about Amalgamated Bank, Ando, and Beneficial State.
This may seem like a lot of effort, but… is it, really? You work your ass off for your money. Then you give it to an institution whose entire business is predicated on the idea that it’s trustworthy. And then you stay with them forever—the average American has the same checking account for 16 years! Do you want to spend 16 years supporting a company that is actively taking part in the destruction of our planet?
2. Open an account
OK, you found a bank. Awesome. Now we’re onto the easy part.
Start small: open a checking account. Don’t worry about replicating your entire financial picture at your new spot at this moment, just get in. I seeded my account with a hundred bucks and was out the door in minutes.
This step is primarily about verifying your identity. The Customer Identification Program, a provision the 2001 Patriot Act, requires that a bank be very sure you are who you say you are. This is meant to guard against money laundering and financing terrorism and stuff like that. Larger banks may have tech that lets them do this virtually; if your new bank does too, you can probably skip step 3.
3. Set up online banking
Once you have one account up and running, most banks will let you open others using their online portal—without having to go to a branch and sign anything else.
Now you can start doing things like setting up a savings account and configuring bill pay. You can use your routing number to send yourself money if you want, though you’ll probably have to pay a fee. (I wrote myself a check.) But don’t move all your money over yet, because it’s time to…
4. Pay your bills
I waited till the beginning of the month for this newsletter on purpose. Most of your bills are due right around now. (If you are on a different schedule, wait until the week you pay them to make this change.)
Assuming you pay online, here’s the easy way to switch everything over: As you settle each charge, change it to pull funds from your new bank account. It can take a little time for some accounts to connect, so making these moves now will give you the best chance of getting each one rolling by the next cycle.
If you’re not the type of person who tracks every bill in a spreadsheet or a finance app, it might be a good idea to check the past 6 or so months of account activity to make sure you’ve got all your bills accounted for.
4.5 Get paid yourself
Don’t forget to switch your direct deposit over!
5. Wait a month
We all have so much digital cruft floating around in the ether, it’s not a bad idea to be extra sure everything is transferred over before you close that shop completely. Leave a small amount of money in your old account until you’re positive all your credit cards, loans, streaming services, and whatnot are hooked up to the right institution. Once you’re sure, it’s time to …
6. Close your account
Depending on your bank, you may have to go in person to sign an official form, though some banks will let you do this over the phone. Whichever way you choose, make sure to withdraw all your money before you make it officially official—otherwise you’ll have to wait for your old bank to send you a check with whatever’s left in your account.
7. Send a breakup note
This is important. The big retail banks have so many customers (BofA: 67 million), they probably wouldn’t even notice if 10,000 people ditched them in a single month. And they almost certainly wouldn’t attribute that change to their fossil fuel policies. Unless you tell them.
“I say put it in writing,” says Fajans-Turner. This means a letter, printed on paper, sent through the mail. Why so old school? “They just don’t make it easy to find the CEO’s email addresses,” she says.
Maybe you’ll be able to find them. (I found one.) But however you contact your bank, I’ve got you covered. I worked with BankFWD on an all-purpose breakup note template you can send to your bank, and you can get it ➡️ here ⬅️.
I know this sounds like a lot, but, as the old saying goes: money speaks louder than words. You might spend an hour or two making this switch, but once you do, you won’t even notice that it happened. Your money will still be safe in a big digital drawer, living its secret life when you’re not watching. And instead of running off to frack at Bo Peep’s place, your bucks are helping small business owners, investing in clean energy, and generally not being shitty.
So maybe you will notice. And maybe thinking about it will make you feel good. I hope so.
Take care of yourselves—and each other
Joe
joe@one5c.com