Banking
The money deposited in or borrowed from private banks adds to the power of a global financial system that undermines local economies and furthers environmental destruction. Creating local alternatives to that system can help reverse the damage – and it’s not as difficult as you might think.
One of the easiest steps you can take to help your local economy is to move your bank account from a large national bank to a community financial institution: a local bank or credit union focused specifically on supporting local businesses and citizens. The collective impact of millions of people transferring assets from multinational to local institutions would significantly shift the dynamic of the global financial system.
Take action
- Find a credit union near you with the World Council of Credit Unions' map Our Global Networks. We encourage you to choose smaller, locally based and rooted credit unions if possible.
- Learn more about why and how to move your money with Green America's Community Investing Guide (US).
- Organize a local move-your-money campaign with the Institute for Local Self-Reliance's resource list Tools for Starting a Local Move Your Money Campaign.
- Find a community bank near you with the directories on Find a Better Bank (US) and the Community Savings Bank Association (UK).
- Compare banks and credit unions in your area based on a number of local impact metrics with Banklocal.info (US).
- Find a bank that offers environmentally and socially-responsible services through the Global Alliance for Banking on Values' map Find Members. Note: some of the member banks are national in scope.
Get inspired
- Triodos Bank in the UK focuses on financing social, cultural, and environmental initiatives such as organic farming, childcare facilities, small businesses, and renewable energy projects.
- The Ecology Building Society in the UK offers savings accounts and mortgages for co-housing, renovations, and other sustainable construction projects.
- Maine Harvest Federal Credit Union is the only financial institution in the US that focuses its loans on growing a healthy local food system.
- The Clean Energy Federal Credit Union in the US state of Colorado focuses on financing small-scale renewable energy projects.
Community banks are locally owned and operated. Services are offered and lending decisions are made based on an understanding of local community members' needs. Community development banks go one step further and specifically focus on the needs of underserved community members, such as financing for affordable housing.
Get started
- HowStuffWorks' article Can You Really Start Your Own Bank? provides a quick overview of the process, primarily for a US audience. The process differs greatly by country.
Get inspired
- Residents of an impoverished neighborhood in Fortaleza, Brazil, founded Banco Palmas – their own community bank, governed and managed by local residents for local needs. Building on its success, others have created 52 similar banks in Brazil, all joined in a Network of Community Banks.
- Members of the Union de Cooperativas Tosepan in Cuetzalan, Mexico, have created their own cooperative bank, Tosepantomin.
- A few bankers started the Cooperative for Ethical Financing, in Zagreb, Croatia, which is cooperatively owned and democratically governed by its own members.
Credit unions are cooperative non-profits structured like banks. They make loans and offer checking and savings accounts, with all profits returned to members. More than 86,000 credit unions provide community-based financial services in 118 countries.
Take action
- Contact a credit union association in your country through the World Council of Credit Unions' map Our Global Networks to learn how to get started.
- Rules and regulations vary from country to country, but in the US, setting up a credit union is not as daunting as it sounds. The initial hurdle is to enlist at least 500 members who each pay a fee of $5-25, and to create an oversight committee with at least one certified public accountant (CPA). See a quick overview on how to start a credit union with Wonder's list of steps, Credit Union Creation Process.
- Understand the full process in the US with the National Credit Union Association's Field of Membership Guide. When your group is ready, apply through NCUA's Charter page.
Get inspired
- The Maine Harvest Federal Credit Union in Maine is the “only fully-regulated financial institution focused on growing a healthy, local food system" in the US. All its loans go to small farms and food producers.
- The Permaculture Credit Union in New Mexico was the only US banking institution created to align with permaculture ethics, giving loans for conservation projects, home sustainability upgrades, local farms, and more. (Unlike big banks, the US government did not bail it out in the 2008 financial crisis, and it has since merged with a larger regional credit union.)
Rotating savings and credit associations (ROSCAs) are collective, peer-to-peer saving and lending systems that have flourished across the Global South and among immigrant communities since the 1960s. ROSCAs go by different names in different countries: arisan in Indonesia, tanda in Mexico, and susu in the Caribbean.
Take action
- Learn how to set up a ROSCA with the United Nations Food and Agriculture Organization's guide The Group Savings Resource Book, page 30. The handbook also features case studies and discussion of advantages and drawbacks.
Get inspired
- The Banker Ladies is a short documentary about ROSCAs, cooperatives, and mutual aid amongst Black women in Toronto, Canada.
- Community members in Dukuh Sebatang village in Yogyakarta, Indonesia, have created a ROSCA for purchasing toilets to improve community sanitation.
In many countries, the central bank – which has the power to create money and determine interest rates – is owned at least in part by the public. But in others – most notably the US – the central bank is owned and run by private interests. Even states and municipalities must borrow and deposit money through the private banking sector. The movement for public banking is about advocating for banks that are dedicated not to profit maximization, but to the public interest.
Get started
- On the Public Banking Institute website, learn what a public bank is, why public banking is important, and why you should join the public banking movement.
- Raise support for a public bank in your area with the Public Banking Institute's Advocacy Kit, handbook on How to Start a Public Bank, and other resources.
- Check out the Public Banking Forum Ireland to learn about the movement for public banking in Ireland.
Get inspired
- North Dakota is the only state in the US with a publicly owned bank. In the 100 years since it was founded, the Bank of North Dakota has had a huge impact: the state today has nearly six times as many local financial institutions per person as the country overall; and North Dakota's smaller banks have 83 percent of the market, compared with 29 percent nationally. Learn more in the article Public Banks: the Bank of North Dakota from the Institute for Local Self-Reliance.
Local finance and banking alternatives can help communities and local economies, but their impacts will not be big enough to fundamentally remake the global financial system. For that, policy changes that extend beyond the local level will be needed.
Get started
- The International Movement for Monetary Reform is one place to learn about the policy changes needed to transform the global financial system – in particular, taking money creation out of the hands of private banks and vesting it in governments.
- In the United States, the Public Banking Institute has been pushing for public banks at the state level. Encourage your state to create a public bank with the tips, sample letters, and more in their Advocacy Kit.
- The Pathways to a Peoples’ Economy Toolkit contains a number of policies and case studies on limiting the size and power of banks and creating financial institutions that prioritize the communities they serve. The toolkit is US-based but many of the steps can be applied elsewhere.
- Learn how US cities and states can fight back against the power of big banks in the Banking chapter of Fighting Monopoly Power, by the Institute for Local Self-Reliance. It offers some "potent levers that states can pull to curb the power of megabanks and strengthen and expand community banks and credit unions." (Scroll down to the section, "How States and Cities Can Fight Back.")
Get inspired
- The Transnational Institute's book Public Finance for the Future We Want describes how public finance is shaping regenerative and redistributive economies around the world, from India to Germany, Costa Rica to Vietnam. Available as a free download in English, Spanish, Italian, and Greek.
- In the talk Real Wealth – A Future We Can Bank On, Ellen Brown, founder of the US-based Public Banking Institute and author of The Web of Debt, explodes several common myths about banks.
- The animated film Money as Debt, by Canadian filmmaker Paul Grignon, illustrates the origins and development of the modern, debt-based money system.
- The Public Banking Institute has information on existing laws and statutes governing public banking, as well as legislation proposed in every state and many municipalities in the US.
- The International Movement for Monetary Reform, with member organizations in dozens of countries worldwide, is a good source of information on policy changes needed in particular countries.
- The report Banking on Climate Chaos, by a coalition of climate justice organizations, exposes how "In the 5 years since the Paris Agreement, the world’s 60 biggest banks have financed fossil fuels to the tune of $3.8 trillion."
- Community banking and lending systems are a great improvement over the global financial system. But in places where non-monetized exchange is still common, even the most well-intentioned initiatives can draw people out of community-based self-reliance onto the bottom rungs of the global economic system. The article Small Loans, Big Problems: the False Promise of Microfinance, by Helena Norberg-Hodge, explores the pitfalls of microfinance in greater depth.
- Although the formal Move Your Money campaigns have mostly dissolved since the peak of the 2008 financial collapse, the principles behind them still remain valid. Learn about the US-based campaign in the article Move Your Money: A New Year's Resolution in the Huffington Post, and about the UK-based campaign in the article Divest! by Move Your Money UK.
- The study Solidarity finance through community development banks as a strategy for reshaping local economies: lessons from Banco Palmas looks at the potential benefits of community development banks in Brazil, based on the successes of Banco Palmas and its local currency. Available in English, Spanish and Portuguese.