By Kayla O’Neill
Being a thoughtful consumer doesn’t stop with where you choose to spend your dollars. It also matters where you choose to save them. In the face of rising income inequality and fossil fuel investments, campaigns increasingly encourage consumers to “break up with their mega-banks.” Community development banks and credit unions are institutions that can strengthen local communities, support good green businesses, and lift families out of poverty.
But just how well are these alternative banking options performing on those social measures? Aspiration, Spring Bank, and Amalgamated Bank are three that have recently achieved Certified B Corps status. They each offer FDIC-insured banking services in the United States, but each takes a different approach to creating social change through banking.
Aspiration is the newest on the scene, having been certified for just over a year. They were founded in partnership with Radius Bank, an innovative community bank based in Boston. Aspiration was quick to earn Money Magazine’s designation of “Best Checking Account in America” for their one percent APY interest-paying checking account. They also claim to be “one of the fastest growing fintech startups of all time,” and this is backed by the fact that they have 11 roles for which they are hiring as of the time of this writing. Aspiration does not have its own branches or ATMs, instead focusing on online banking, while allowing its investors to visit any ATM of their choice with all fees reimbursed. They target a younger demographic with referral incentives and a sleek mobile app interface.
Besides their high return checking account, Aspiration is differentiated by its “Pay What Is Fair” model. With no mandatory fees, you as a consumer decide how much to pay them for their services. Ten percent of their top-line revenue is donated to U.S. microfinance social enterprises. They also make charitable donations easy and offer alternative investing options that take into account environmental, social, and governance (ESG) factors. Aspiration managed to get a B Score of 123 in its first report from B Lab thanks to its achievements in the areas of Environment, Workers, Customers, Community, and Governance.
Spring Bank is a Community Development Financial Institution (CDFI) that addresses both personal and business banking needs of unbanked and underbanked residents of the Bronx and Harlem with two brick-and-mortar branches. With a client base comprised of individuals from low and moderate income communities in New York City, Spring Bank serves a neglected population in a transparent and affordable way. They seek out Food Bank for NYC’s clients and also make opening an account accessible to more people by accepting IDNYC, a municipal identification card available to all New York City residents, as an approved form of identification. Spring Bank’s partner organizations allow it to provide its clients with additional services such as free credit counseling and tax preparation.
In April of last year, Spring Bank received its first B Score of 111. Though it was founded more than a decade ago in 2004, the question remains if Spring Bank risks its long-term financial sustainability by serving communities that are not as profitable in order to better fill its mission.
Amalgamated Bank has been at this game for more than nine decades. Founded by a textile worker union leader in 1923, Amalgamated Bank pioneered the first-ever unsecured personal loans for working families. They also introduced the first-ever foreign-exchange transfer service, to enable workers to send remittances to their family members abroad. While most of its branches are in New York City, it also has locations in Washington, D.C. and southern California. Though it has been doing good for quite some time, Amalgamated Bank just received its first B Score of 87 in January of this year. Amalgamated Bank is one of several B Corps to be included in the Global Alliance for Banking on Values network of progressive values-based banks around the world.
While credit unions and community banks are nothing new, today’s alternative banking options are more impact-driven than ever, leading with their impact in telling their story and explaining their value. For those looking to start a new banking relationship, a B Corp certification can now be added to the evaluation criteria.