The Jefferson Avenue commercial district in Buffalo, New York, is anchored by a supermarket.
There are dozens of other businesses and services along the 12-block corridor — a couple of bank branches, a library, a coffee shop, gas stations, a small plaza with a dollar store and a primary care clinic and a business incubator for entrepreneurs of color.
But Tops Friendly Markets, the only grocery store on Buffalo’s vast East Side, is the center of activity. More than just a place to buy food, pick up medications and use an ATM, the store is a communal gathering space in a predominantly Black neighborhood that, for generations, has been segregated, isolated and disenfranchised from the wealthier — and whiter — parts of the city.
Which explains how it came to be the site of a mass shooting on a spring day in May of last year. On that Saturday, a gunman, who lived 200 miles away in another part of the state, drove to Jefferson Avenue and went into Tops, and in just a few minutes killed 10 people, injured three and inflicted mass trauma across the community.
It is a scenario that has sadly, and repeatedly, played out in other parts of the country that have experienced mass shootings. But this one came with a twist: The gunman’s intention was to kill as many Black people as possible.
To achieve that, he specifically targeted a ZIP code with one of the highest percentages of Black residents in New York state. All 10 who died that day were Black.
“The mere fact that someone can research, ‘Where will the greatest number of Black people be … on a Saturday morning,’ that’s not by chance,” said Franchelle Parker, a community organizer and executive director of Open Buffalo, a nonprofit focused on racial, economic and ecological justice. “That’s not a mistake. It’s a community that’s been deeply segregated for decades.”
The day of the shooting, Parker, who grew up in nearby Niagara Falls, was driving to Tops, where she planned to buy a donut and an unsweetened iced tea before heading into the Open Buffalo office, which is located a block away from Tops. The mother of two had intended to complete the mundane task of cleaning up her desk — “old coffee cups and stuff” — after a busy week.
She saw the news on Twitter and didn’t know if she should keep driving to Jefferson Avenue or turn around and go back home. She eventually picked the latter.
When she showed up the next day, there were thousands of people grieving in the streets. “The only way that I could explain my feeling, it was almost like watching an old war movie when a bomb had gone off and someone’s in, like, shell shock. That’s how it felt,” said Parker, vividly recounting the community’s collective trauma in a meeting room tucked inside of Open Buffalo’s second-story office on Jefferson Avenue.
Almost immediately following the May 14, 2022, massacre, which was the second-deadliest mass shooting in the United States last year, conversations locally and nationally turned to the harsh realities of the East Side and how long-standing factors that affect the daily life of residents — racism, poverty and inequity — made the community an ideal target for a white supremacist.
Now, more than a year after the tragedy, there is growing concern that not enough is being done fast enough to begin to dismantle those factors. And amid those conversations, there are mounting calls for the banking industry — whose historical policies and practices helped cement the racial segregation and disinvestment that ultimately shaped the East Side — to leverage its collective power and influence to band together in an effort to create systemic change.
The ideas about how banks should support the East Side and better embed themselves in the neighborhood vary by people and organizations. But the basic argument is the same: Banks, in their role as financiers and because of the industry’s history of lending discrimination, are obligated to bring forth economic prosperity in disinvested communities like the East Side.
I know banks are often looked upon sort of like a panacea, but I don’t particularly see it that way. I think others have a role to play in all of this.
Chiwuike Owunwanne, corporate responsibility officer at KeyBank
“Banks have been very good at providing charitable contributions to the Black community. They get an ‘A’ for that,” said The Rev. George Nicholas, an East Side pastor who is also CEO of the Buffalo Center for Health Equity, a four-year-old enterprise focused on racial, geographic and economic health disparities. “But doing the things that banks can do in terms of being a catalyst for revitalization and investment in this community, they have not done that.”
To be sure, banks’ ability to reverse the course of the community isn’t guaranteed — and there is no formula to determine how much accountability they should hold to fix deeply entrenched problems like racism. Several Buffalo-area bankers said that while the Tops shooting heightened the urgency to help the East Side, the industry itself cannot be the sole driver of change.
“There are a lot of institutions … that can certainly play a part in reversing the challenges that we see today,” said Chiwuike “Chi-Chi” Owunwanne, a corporate responsibility officer at KeyBank, the second-largest bank by deposits in Buffalo. “I know banks are often looked upon sort of like a panacea, but I don’t particularly see it that way. I think others have a role to play in all of this.”
A long history of segregation
How the East Side — and the Tops store on Jefferson Avenue — became the destination for a racially motivated mass murderer is a story about racism, segregation and disinvestment.
Even as it bears the nickname “the city of good neighbors,” Buffalo has long been one of the most racially segregated cities in the United States. Of the 114,965 residents who live on the East Side, 59% are Black, according to data from the 2021 U.S. Census American Community Survey. The percentage is even higher in the 14208 ZIP code, where the Tops store is located. In that ZIP code, among 11,029 total residents, nearly 76% are Black, the census data shows.
The city’s path toward racial segregation started in the early 20th century when a small number of job-seeking Black Americans migrated north to Buffalo, a former steel and auto manufacturing hub at the far northwestern end of New York state. Initially, they moved into the same neighborhoods as many of the city’s poorer immigrants and lived just east of what is today the city’s downtown district. As the number of Blacks arriving in Buffalo swelled in the 1940s, they were increasingly confronted with various housing challenges, including racist zoning laws and restrictive deed covenants that kept them from buying homes in more affluent white areas.
Black Buffalonians also faced housing discrimination in the form of redlining, the practice of restricting the flow of capital into minority communities. In 1933, as the Great Depression roiled the economy, a temporary federal agency known as the Home Owners’ Loan Corporation used government bonds to buy out and refinance mortgages of properties that were facing or already in foreclosure. The point was to try to stabilize the nation’s real estate market.
As part of its program, HOLC created maps of American cities, including Buffalo, that used a color coding scheme — green, blue, yellow and red — to convey the perceived riskiness of making loans in certain neighborhoods. Green was considered minimally risky; other areas that were largely populated by immigrant, Black or Latino residents were labeled red and thus determined to be “hazardous.”
“The goal was to free up mortgage capital by going to cities and giving banks a way to unload mortgages, so they could turn around and make more mortgage loans,” said Jason Richardson, senior director of research at the National Community Reinvestment Coalition, an association of more than 750 community-based organizations that advocates for fair lending. “It was kind of a radical concept and it has evolved over the decades into our modern mortgage finance system.”
The Federal Housing Administration, which was established as a permanent agency in 1934, used similar methods to map urban areas and labeled neighborhoods from “A” to “D,” with “A” considered to be the most financially stable and “D” considered the least. Neighborhoods that were largely Black, even relatively stable ones, were put in the “D” category.
The result was that banks, which wanted to be able to sell mortgage loans to the FHA, were largely dissuaded from making loans in “risky” areas. And Buffalo’s East Side, where the majority of Blacks were settling, was deemed risky. Unable to get loans, Blacks couldn’t buy homes, start businesses or build equity. At the same time, large industrial factories on the East Side were closing or moving away, limiting job opportunities and contributing to rising poverty levels.
“Today what we’re left with is the residue of this process where we’ve enshrined … a pattern of economic segregation that favors neighborhoods that had fewer Black people in them and generally ignores neighborhoods that had African Americans living in them,” Richardson said.
Case in point: Research by the National Community Reinvestment Coalition shows that three-quarters of neighborhoods that were once redlined are low- to moderate-income neighborhoods today, and two-thirds of them are majority minority communities.
Adding to the division between Blacks and whites in Buffalo was the construction of a highway called the Kensington Expressway. Built during the 1960s, the below-grade, limited-access highway proved to be a speedy way for suburban workers to get to their downtown jobs. But its construction cut off the already-segregated East Side even more from other parts of the city, displacing residents, devaluing houses and destroying neighborhoods and small businesses.
As a result of those factors and more, many Black residents have become “trapped” on the East Side, according to Dr. Henry Louis Taylor Jr., a professor of urban and regional planning at the University at Buffalo. In 1987, Taylor founded the UB Center for Urban Studies, a research, neighborhood planning and community development institute that works on eliminating inequality in cities and metropolitan regions. In September 2021, eight months before the Tops shooting, the Center for Urban Studies published a report that compared the state of Black Buffalo in 1990 to present-day conditions. The conclusion: Nothing had changed for Blacks over 31 years.
As of 2019, the Black unemployment rate was 11%, the average household income was $42,000 and about 35% of Blacks had incomes that fell below the poverty line, the report said. It also noted that just 32% of Blacks own their homes and that most Blacks in the area live on the East Side.
“Those figures remain virtually unchanged while the actual, physical conditions that existed inside of the community worsened,” Taylor told American Banker in an interview in his sun-filled office at the center, located on the University at Buffalo’s city campus. “When we looked upstream to see what was causing it, it was clear: It was systemic, structural racism.”
Banks’ moral obligations
As the East Side struggled over the decades with rampant poverty, dilapidated housing, vacant lots and disintegrating infrastructure, banks kept a physical presence in the community, albeit a shrinking one. In mid-2000, there were at least 20 bank branches scattered across the East Side, but by mid-2022, the number had fallen to around 14, according to the Federal Deposit Insurance Corp.’s deposit market share data. The 14 include four new branches that have opened since early 2019 — Northwest Bank, KeyBank, Evans Bank and BankOnBuffalo.
The first two branches, operated by Northwest in Columbus, Ohio, and KeyBank, the banking subsidiary of KeyCorp in Cleveland, were requirements of community benefits agreements negotiated between each bank and the National Community Reinvestment Coalition. In both cases, Northwest and KeyBank agreed to open an office in an underserved community.
Evans Bank opened its first East Side branch in the fall of 2021. The office is located in the basement of an $84 million affordable senior housing building that was financed by Evans, a $2.1 billion-asset community bank headquartered south of Buffalo in Angola, New York.
Banks have been very good at providing charitable contributions to the Black community. They get an ‘A’ for that. But doing the things that banks can do in terms of being a catalyst for revitalization and investment in this community, they have not done that.
The Rev. George Nicholas, an East Side pastor who is also CEO of the Buffalo Center for Health Equity
On the community and economic development front, banks have had varying levels of participation. Buffalo-based M&T Bank, which holds a whopping 64% of all deposits in the Buffalo market and is one of the largest private employers in the region, has made consistent investments in the East Side by supporting Westminster Community Charter School, a kindergarten through eighth-grade school, and the Buffalo Promise Neighborhood, a nonprofit organization focused on improving access to education in the city’s 14215 ZIP code.
Currently, Buffalo Promise Neighborhood operates four schools. In addition to Westminster, it runs Highgate Heights Elementary, also K-8, as well as two academies that serve children ages six weeks through pre-kindergarten. Twelve M&T employees are dedicated to the program, according to the Buffalo Promise Neighborhood website. The bank has invested $31.5 million into the program since its 2010 launch, a spokesperson said.
Other banks are making contributions in other ways. In addition to the Jefferson Avenue branch and as part of its community benefits plan, Northwest Bank, a $14.2 billion-asset bank, supports a financial education center through a partnership with Belmont Housing Resources of Western New York. Meanwhile, the $198 billion-asset KeyBank gave $30 million for bridge and construction financing for Northland Workforce Training Center, a $100 million redevelopment project at a former manufacturing complex on the East Side that was partially funded by the state.
BankOnBuffalo’s East Side branch is located inside the center, which offers KeyBank training in advanced manufacturing and clean energy technology careers. A subsidiary of $5.6 billion-asset CNB Financial in Clearfield, Pennsylvania, BankOnBuffalo’s office opened a month after the shooting. The timing was coincidental, but important, said Michael Noah, president of BankOnBuffalo.
“I think it just cemented the point that this is a place we need to be, to be able to be part of these communities and this community specifically, and be able to build this community up,” Noah said.
In terms of public-private collaboration, some banks have been involved in a deeper way. In 2019, New York state, which had already been pouring $1 billion into Buffalo to help revitalize the economy, announced a $65 million economic development fund for the East Side. The initiative is focused on stabilizing neighborhoods, increasing homeownership, redeveloping commercial corridors including Jefferson Avenue, improving historical assets, expanding workforce training and development and supporting small businesses and entrepreneurship.
In conjunction with the funding, a public-private partnership called East Side Avenues was created to provide capital and organizational support to the projects happening along four East Side commercial corridors. Six banks — Charlotte, North Carolina-based Bank of America, the second-largest bank in the nation with $2.5 trillion of assets; M&T, which has $203 billion of assets; KeyBank; Warsaw, New York-based Five Star Bank, which has about $6 billion of assets; Northwest and Evans — are among the 14 private and philanthropic organizations that pledged a combined $8.4 million to pay for five years’ worth of operational support, governance and finance, fundraising and technical assistance to support the nonprofits doing the work.
Laura Quebral, director of the University at Buffalo Regional Institute, which is managing East Side Avenues, said the banks were the first corporations to step up to the request for help, and since then have provided loans and other products and education to keep the program moving.
Their participation “is a signal to the community that banks cared and were invested and were willing to collaborate around something,” Quebral said. “Being at the table was so meaningful.”
Richard Hamister is Northwest’s New York regional president and former co-chair of East Side Avenues. Hamister, who is based in Buffalo, said banks are a “community asset” that have a responsibility to lift up all communities, including those where conditions have arisen that allow it to be a target of racism like the East Side.
“We operate under federal charters, so we have an obligation to the community to not only provide products and services they need but also support when you go through a tragedy like that,” Hamister said. “We also have a moral obligation to try to help when things are broken … and to do what we can. We can’t fix everything, but we’ve got to fix our piece and try to help where we can.”
In the wake of a tragedy
After the massacre, there was a flurry of activity within banks and other organizations, local and out-of-town, to respond to the immediate needs of East Side residents. With the community’s only supermarket closed indefinitely, much of the response centered around food collection and distribution. Three of M&T’s five East Side branches, including the Jefferson Avenue branch across the street from Tops, became food distribution sites for weeks after the shooting. On two consecutive Fridays, Northwest provided around 200 free lunches to the community, using a neighborhood caterer who is also the bank’s customer. And BankOnBuffalo collected employee donations that amounted to more than 20 boxes of toiletries and other items that were distributed to a nonprofit.
At the same time, M&T, KeyBank and other banks began financial donations to organizations that could support the immediate needs of the community. KeyBank provided a van that delivered food and took people to nearby grocery stores. Providence, Rhode Island-based Citizens Financial Group, whose ATM inside Tops was inaccessible during the store’s temporary closure, installed a fee-free ATM near a community center located about a half-mile north of Tops, and later put a permanent ATM inside the center that remains there today. And M&T rolled out a short-term loan program to provide capital to East Side small-business owners.
One of the funds that benefited from banks’ support was the Buffalo Together Community Response Fund, which has raised $6.2 million to address the long-term needs of the East Side.
Bank of America and Evans Bank each donated $100,000 to the fund, whose list of major sponsors includes four other banks — JPMorgan Chase, Citigroup, M&T and KeyBank. Thomas Beauford Jr., a former banker who is co-chair of the response fund, said banks, by and large, directed their resources into organizations where the dollars would have an immediate impact.
“Banks said, ‘Hey, you know … it doesn’t make sense for us to try to build something right now. … We will fund you in the work you’re doing,'” said Beauford, who has been president and CEO of the Buffalo Urban League since the fall of 2020. “I would say banks showed up in a big way.”
Fourteen months later, banks say they are committed to playing a positive role on the East Side. For the second year, KeyBank is sponsoring a farmers’ market on the East Side, an attempt to help fill the food desert in the community. Last fall, BankOnBuffalo launched a mobile “bank on wheels” truck that’s stationed on the East Side every Wednesday. The 34-foot-long truck, which is staffed by two people and includes an ATM and a printer to make debit cards, was in the works before the shooting, and will eventually make four stops per week around the Buffalo area.
Evans has partnered with the city of Buffalo to construct seven market-rate single family homes on vacant lots on the East Side. The relationship with the city is an example of how banks can pair up with other entities to create something meaningful and lasting, more than they might be able to do on their own, said Evans President and CEO David Nasca.
The bank has “picked areas” where it can use its resources to make a difference, Nasca said.
“I don’t think the root causes can be ameliorated” by banks alone, he said. “We can’t just grant money. It has to be within our construct of a financial institution that invests and supports the public-private partnership. … All the oars [need to be] pulling together or this doesn’t work.”
‘Little or no engagement with minorities’
All of these efforts are, of course, welcomed by the community, but there is still criticism that banks haven’t done enough to make up for their past contributions to segregating the city. And perhaps more importantly, some of that criticism centers on banks failing to do their most basic function in society — provide credit.
In 2021, the New York State Department of Financial Services issued a report about redlining in Buffalo. The regulator looked at banks and nonbank lenders and found that loans made to minorities in the Buffalo metro area made up 9.74% of total loans in Buffalo. Overall, Black residents comprise about 33% of Buffalo’s total population of more than 276,000, census data shows.
The department said its investigation showed the lower percentage was not due to “excessive denials of loan applications based on race or ethnicity,” but rather that “these companies had little or no engagement with minorities and generally made scant effort to do so.”
“The unsurprising result of this has been that few minority customers or individuals seeking homes in majority-minority neighborhoods have made loan applications … in the first instance.”
Furthermore, accusations of redlining persist today, even though the practice of discriminating in housing based on race was outlawed by the Fair Housing Act of 1968.
In 2014, Evans was accused of redlining by the New York State Attorney General, which said the community bank was specifically avoiding making mortgage loans on the East Side. The bank, which at the time had $874 million of assets, agreed to pay $825,000 to settle the case, but Nasca maintains that the charges were unfounded. He points to the fact that the bank never had a fair lending or fair housing violation, no specific incidents were ever claimed and that the bank’s Community Reinvestment Act exam never found evidence of discriminatory or illegal credit practices.
The bank has a greater presence on the East Side today, but that’s because it has grown in size, not because it is trying to make up for previous accusations of redlining, he said.
“Ten years ago, our involvement [on the East Side] certainly wasn’t what you’re seeing today,” Nasca said. “We were looking to participate more, but we were participating within our means and our reach. As we have grown, we have built more resources to be able to do more.”
Shortly after accusations were made against Evans, Five Star Bank, the banking arm of Financial Institutions in Warsaw, New York, was also accused of redlining by the state Attorney General. Five Star, which has been growing its presence in the Buffalo market for several years, wound up settling the charges for $900,000 and agreeing to open two branches in the city of Rochester.
KeyBank is currently being accused of redlining by the National Community Reinvestment Coalition. In a 2022 report, the group said that KeyBank is engaging in systemic redlining by making very few home purchase loans in certain neighborhoods where the majority of residents are Black. Buffalo is one of several cities where the bank’s mortgage lending “effectively wall[ed] out Black neighborhoods,” especially parts of the East Side, the report said.
KeyBank denied the allegations. In March, the coalition asked regulators to investigate the bank’s mortgage lending practices.
Beyond providing more credit, some community members believe that banks should be playing a larger role in addressing other needs on the East Side. And the list of needs runs the gamut from more grocery stores to safe, affordable housing to infrastructure improvements such as street and sidewalk repairs.
Alexander Wright is founder of the African Heritage Food Co-op, an initiative launched in 2016 to address the dearth of grocery store options on the East Side, where he grew up. Wright said that while banks’ philanthropic efforts are important, banks in general “need to be in a place of remediation” to fix underlying issues that the industry, as a whole, helped create. (After publication of this story, Wright left his job as CEO of the African Heritage Food Co-Op.)
Aside from charitable donations, banks should be finding more ways to work directly with East Side business owners and entrepreneurs, helping them with capital-building support along the way, Wright said. One place to start would be technical assistance by way of bank volunteers.
“Banks are always looking to volunteer. ‘Hey, want to come out and paint a fence? Want to come out and do a garden?'” Wright said. “No. Come out here and help Keshia with bookkeeping. Come out here and do QuickBooks classes for folks. Bring out tax experts. Because these are things that befuddle a lot of small businesses. Who is your marketing person? Bring that person out here. Because those are the things that are going to build the business to self-sufficiency.
“Anything short of the capacity-building … that will allow folks to rise to the occasion and be self-sufficient I think is almost a waste,” Wright added. “We don’t need them to lead the plan. What we need them to do is be in the community and [be] hearing the plan and supporting it.”
Parker, of Open Buffalo, has similar thoughts about the role that banks should play. One day, soon after the massacre, an ATM appeared down the street from Tops, next to the library that sits across the street from Parker’s office. Soon after the ATM was installed, Parker began fielding questions from area residents who were skeptical of the machine and wanted to know if it was legitimate. But Parker didn’t have any information to share with them. “There was no outreach. There was no community engagement. So I’m like, ‘Let me investigate,'” she said. “I think that’s a symptom of how investment is done in Black communities, even though it may be well-intentioned.”
As it turns out, the temporary ATM belonged to JPMorgan Chase. The megabank has had a commercial banking presence in Buffalo for years, but it didn’t operate a retail branch in the region until last year. Today it has four branches in operation and plans to open another two by the end of the year, a spokesperson said.
After the Tops shooting, the governor’s office reached out to Chase asking if the bank could help in some way, the spokesperson said in response to the skepticism. The spokesperson said that while the Chase retail brand is new to the Buffalo region, the company has been active in the market for decades by way of commercial banking, private banking, credit card lending, home lending and other businesses.
In addition to the ATM, the bank provided funding to local organizations including FeedMore Western New York, which distributes food throughout the region.
“We are committed to continuing our support for Buffalo and helping the community increase access to opportunities that build wealth and economic empowerment,” the spokesperson said in an email.
In the year since the massacre, there has been some progress by banks in terms of their interest in listening to the East Side community and learning about its needs, said Nicholas. But he hasn’t felt an air of urgency from the banking community to tackle the issues right now.
“I do experience banks being a little more open to figuring out what their role is, but it’s slow. It’s slow,” said Nicholas. The senior pastor of the Lincoln Memorial United Methodist Church, located about a mile north from Tops, Nicholas is part of a 13-member local advisory committee for the New York arm of Local Initiatives Support Coalition, or LISC. The group is focused on mobilizing resources, including banks, to address affordable housing in Western New York, specifically in the inner city, as well as training minority developers and connecting them to potential investors, Nicholas said.
Of the 13 members, seven are from banks — one each from M&T, Bank of America, BankOnBuffalo, Evans and KeyBank, and two members from Citizens Financial Group. One of the priorities of LISC NY is health equity, and the fact that banks are becoming more engaged in looking at health disparities is promising, Nicholas said. Still, they have more work to do, he said.
“I need them to think more on how to strengthen and build the economy on the East Side and provide leadership around that, not only to provide charitable things, but using sound business and banking and community development principles to say, ‘OK, if we’re going to invest in this community, these are the types of things that need to happen in this community,’ and then encourage their partners and other people they work with … to come fully in on the East Side.”
Some bankers agree with the community activists.
“Putting a branch in is great. Having a bank on wheels is great,” said Noah of BankOnBuffalo. “But if you’re not embedded in the community, listening to the community and trying to improve it, you’re not creating that wealth and creating a better lifestyle for everyone.”
What could make a substantial difference in terms of banks’ impact on the community is a combination of collaboration and leadership, said Taylor. He supports the idea of banks leading the charge on the creation of a comprehensive redevelopment and reinvestment plan for the East Side, and then investing accordingly and collaboratively through their charitable foundations.
“All of them have these foundations,” Taylor said. “You can either spend that money in a strategic and intentional way designed to develop a community for the existing population, or you can spend that money alone in piecemeal, siloed, sectorial fashion that will look good on an annual report, but won’t generate transformational and generational changes inside a community.”
Banks might be incentivized to work together because it could mean two things for them, according to Taylor: First, they’d have an opportunity to spend money in a way that would have maximum impact on the East Side, and second, if done right, the city and the banks could become a model of the way to create high levels of diversity, equity and inclusion in an urban area.
“If you prove how to do that, all that does is open up other markets of consumption all over the country because people want to figure out how to do that same thing,” Taylor said.
Some of that is already happening, at least on a bank-by-bank case, said KeyBank’s Owunwanne. Through the KeyBank Foundation, the company is able to leverage different relationships that connect nonprofits to other entities and corporations that can provide help.
“I see this as an opportunity for us to make not just incremental changes, but monumental changes … as part of a larger group,” Owunwanne said “Again, I say that not to absolve the bank of any responsibility, but just as a larger group.”
Downstairs from Parker’s office, Golden Cup Coffee, a roastery and cafe run by a husband and wife team, and some other Jefferson Avenue businesses are trying to build up a business association for existing and potential Jefferson-area businesses. Parker imagined what the group could accomplish if one of the banks could provide someone on a part-time basis to facilitate conversations, provide administrative support and coordinate marketing efforts.
“In the grand scheme of things, when we’re talking about a multimillion dollar [bank], a part-time employee specifically dedicated to relationship-building and building out coalitions, it sounds like a small thing,” Parker said. “But that’s transformational.”
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What Is Axos Business Interest Checking?
Axos Business Interest Checking is a small-business checking account with a $10 monthly maintenance fee. Axos Bank waives the fee in any statement cycle where you maintain a daily balance of at least $5,000.
Axos Business Interest Checking pays up to 1.01% APY on balances up to $20,000. Amounts above this threshold earn interest at far lower rates, but all balances have at least some yield.
Axos Business Interest Checking has some other notable features, including unlimited domestic ATM fee reimbursements, 50 free paper checks when you open your account, and external integration with QuickBooks accounting software. However, there’s a limit of 50 free transactions per month, so it can quickly get expensive for high-volume users.
What Sets Axos Business Interest Checking Apart?
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Free paper checks. This account comes with 50 free paper checks, which should be plenty for most business owners these days.
Unlimited ATM fee reimbursements. There’s no limit to the number or dollar value of ATM fees Axos reimburses with this account. If your business does lots of cash transactions, this is a critical benefit.
50 free transactions per month. You can only complete 50 transactions (including debits, credits, and deposits) each month before incurring a $0.50 fee per transaction. There’s a separate limit of 60 free remote check deposits per month, but that doesn’t solve the fundamental problem of being able to use your debit card less than twice per day on average before paying a surcharge.
Key Features of Axos Business Interest Checking
Axos Business Interest Checking has some important limitations and restrictions, along with some potentially useful features.
Account Fees & Waiver Requirements
This account has a $10 monthly maintenance fee. It’s waived in any statement cycle where you maintain a daily balance of at least $5,000.
Minimum Deposit & Balance Requirements
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Account Yield
Axos Business Interest Checking earns 1.01% APY on balances up to $20,000. Amounts above this threshold earn between 0.10% and 0.20% APY, but there’s no maximum balance to earn interest.
ATM Access
Axos Bank reimburses domestic ATM fees without any limits. You may still pay a surcharge if you use your debit card at an ATM outside the United States.
Transaction Limits
You’re entitled to 50 free transactions (debits, credits, and deposits) per month. After that, there’s a $0.50-per-transaction surcharge. Remote check deposits don’t count toward this limit; you get 60 of those free each month.
Paper Checks
You get 50 free paper checks when you open your account. Check reorders may incur fees, depending on the number and type of checks.
External Integrations
Axos Business Interest Checking integrates with the QuickBooks accounting platform. You can import your checking account activity into QuickBooks whenever you need to.
Business Services
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Axos Bank has a powerful mobile app that’s well-reviewed by verified users. For Business Interest Checking customers, it can do anything the desktop interface can, and it’s a useful hub for your Axos experience if you have more than one account with the bank. Notable capabilities include:
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Deposit Insurance
Axos Business Interest Checking comes with FDIC insurance up to the current limit of $250,000. If Axos Bank fails, the federal government protects balances up to this amount.
Pros & Cons
Axos Business Interest Checking has some clear upsides and some just-as-obvious downsides.
Competitive interest rate on eligible balances
Unlimited domestic ATM fee reimbursements
Full suite of business banking services
$10 monthly fee without waiver
No rewards program
Tight monthly transaction limits
Pros
Axos Business Interest Checking is an interest-bearing checking account with some potentially valuable perks.
Competitive interest rate. Axos Business Interest Checking has one of the better interest rates of any business checking account. It’s right up there with the top consumer high-yield checking accounts.
Unlimited domestic ATM fee reimbursements. Axos Bank reimburses U.S. ATM fees without any dollar value or transaction caps. This is a big advantage over business bank accounts that limit reimbursements or don’t offer them at all.
Free paper checks when you open your account. You get 50 free paper checks when you open your account, which should be enough to see you through weeks if not months of regular business.
Full suite of business services without an in-person appointment. Unlike many online business banks, Axos Bank is a full-service financial institution with loan officers, treasury management specialists, and other human banking experts.
Cons
Axos Business Interest Checking is missing some important features and isn’t particularly friendly to budget-conscious entrepreneurs.
No rewards program. This account has no debit card rewards program and no real purchase perks. In other words, there’s no way to earn a return on everyday business spending.
Tight limits on free monthly transactions. You get just 50 free transaction per month with this account. After that, each transaction costs $0.50. The one exception is remote check deposits, which come with their own limit of 60 per month. But any transaction limits at all are unwelcome in a small-business account (and increasingly uncommon in the space).
$10 monthly maintenance fee without waiver. This account has a $10 monthly maintenance fee. To get it waived, you need to maintain a minimum daily balance of $5,000, which could be tough for very small businesses.
Limits on external integrations. This account has just one external integration of note: QuickBooks. Many otherwise similar accounts integrate with a dozen apps or more, spanning e-commerce, workplace productivity, payments, and other important business processes.
How Axos Business Interest Checking Stacks Up
Before you apply for an Axos Business Interest Checking account, see how it compares to similar small-business checking accounts. Novo Business Checking offers an illuminating head-to-head.
Axos Business Interest Checking
Novo Business Checking
Monthly Fee
$10
$0
Monthly Fee Waiver
$5,000 minimum daily balance
Not needed
Minimum Balance
$100 to open, $0 ongoing
$50 to open, $0 ongoing
Integrations
Yes, QuickBooks only
Yes, about a dozen including Stripe, Amazon, and Shopify
Invoicing
No
Yes, built into the app
Budgeting Tools
No
No
Yield
Up to 1.01% APY
None
ATM Access
Unlimited in the U.S.
Unlimited worldwide
Axos Business Interest Checking’s biggest advantage is its yield on all balances (and its very competitive yield on balances up to $20,000). Elsewhere, Novo Business Checking offers better value thanks to built-in invoicing tools, a dozen third-party integrations, and no monthly fee.
Final Word
There’s more to Axos Business Interest Checking than the typical online small-business checking account. That’s mainly down to Axos Bank’s full spectrum of business banking services rather than anything special about this account itself.
In fact, Axos Business Interest Checking has some important downsides that should give you pause. The monthly fee and transaction limits are problematic for cash-strapped and high-volume businesses, respectively, and this account lacks some potentially useful features (like extensive third-party software integrations) found elsewhere. Axos Business Interest Checking could be the best business banking option for you, but be sure to see what else is out there before deciding for sure.
The Verdict
Our rating
Axos Bank Business Interest Checking
Axos Bank Business Interest Checking is an excellent choice for business owners looking to earn interest on day-to-day balances while benefiting from direct access to human banking professionals. Unlimited domestic ATM withdrawals and 50 free paper checks don’t hurt either. But this account has some glaring downsides, like tight transaction limits and no debit card rewards, so it’s worth seeing what else is out there before applying.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
Banking
4 Different Types of Bank Accounts Explained
Choosing your first bank account isn’t always simple. There are loads of new bank account offers to choose from, each promising different features and perks. How can you tell which one is right for you? Learn about the different types of bank accounts and the key benefits and drawbacks of each.
Open a BMO Harris Premier™ Account online and get a $500 cash bonus when you have a total of at least $7,500 in qualifying direct deposits within the first 90 days of account opening. Expires 9/15. Conditions Apply.
As online banks grow in number and become more sophisticated, more and more small-business owners are asking themselves whether a traditional bank or credit union account makes sense anymore. Unless you just can’t live without the peace of mind that comes with being able to walk into a physical bank branch, the value is less and less clear.
Axos Business Interest Checking certainly gets this. It’s a full-service small-business bank account that puts Axos Bank’s considerable banking know-how at your disposal without ever asking you to visit a physical branch. It pays interest at competitive rates too.
That said, Axos Business Interest Checking has some significant downsides, starting with a monthly maintenance fee that requires a hefty ongoing balance to waive. Before you open an account, make sure you understand the good and the bad.
What Is Axos Business Interest Checking?
Axos Business Interest Checking is a small-business checking account with a $10 monthly maintenance fee. Axos Bank waives the fee in any statement cycle where you maintain a daily balance of at least $5,000.
Axos Business Interest Checking pays up to 1.01% APY on balances up to $20,000. Amounts above this threshold earn interest at far lower rates, but all balances have at least some yield.
Axos Business Interest Checking has some other notable features, including unlimited domestic ATM fee reimbursements, 50 free paper checks when you open your account, and external integration with QuickBooks accounting software. However, there’s a limit of 50 free transactions per month, so it can quickly get expensive for high-volume users.
What Sets Axos Business Interest Checking Apart?
Axos Business Interest Checking stands out for several reasons:
Competitive yield on eligible balances. This account yields 1.01% APY on balances up to $20,000. Balances above this amount pay less interest, but every dollar earns something. That’s unusual for a business checking account.
Free paper checks. This account comes with 50 free paper checks, which should be plenty for most business owners these days.
Unlimited ATM fee reimbursements. There’s no limit to the number or dollar value of ATM fees Axos reimburses with this account. If your business does lots of cash transactions, this is a critical benefit.
50 free transactions per month. You can only complete 50 transactions (including debits, credits, and deposits) each month before incurring a $0.50 fee per transaction. There’s a separate limit of 60 free remote check deposits per month, but that doesn’t solve the fundamental problem of being able to use your debit card less than twice per day on average before paying a surcharge.
Key Features of Axos Business Interest Checking
Axos Business Interest Checking has some important limitations and restrictions, along with some potentially useful features.
Account Fees & Waiver Requirements
This account has a $10 monthly maintenance fee. It’s waived in any statement cycle where you maintain a daily balance of at least $5,000.
Minimum Deposit & Balance Requirements
You need to deposit at least $100 when you open your account. There’s no ongoing minimum balance requirement, but the monthly fee is $10 unless you keep at least $5,000 in the account at the close of business each day.
Account Yield
Axos Business Interest Checking earns 1.01% APY on balances up to $20,000. Amounts above this threshold earn between 0.10% and 0.20% APY, but there’s no maximum balance to earn interest.
ATM Access
Axos Bank reimburses domestic ATM fees without any limits. You may still pay a surcharge if you use your debit card at an ATM outside the United States.
Transaction Limits
You’re entitled to 50 free transactions (debits, credits, and deposits) per month. After that, there’s a $0.50-per-transaction surcharge. Remote check deposits don’t count toward this limit; you get 60 of those free each month.
Paper Checks
You get 50 free paper checks when you open your account. Check reorders may incur fees, depending on the number and type of checks.
External Integrations
Axos Business Interest Checking integrates with the QuickBooks accounting platform. You can import your checking account activity into QuickBooks whenever you need to.
Business Services
As a full-service business bank, Axos offers a range of services for small and midsize companies, such as treasury management (for more complicated financial needs), payment processing assistance and other merchant services, SBA lending, and relationship manager access during extended business hours. Everything is available online; no need to walk into a branch.
Mobile Features
Axos Bank has a powerful mobile app that’s well-reviewed by verified users. For Business Interest Checking customers, it can do anything the desktop interface can, and it’s a useful hub for your Axos experience if you have more than one account with the bank. Notable capabilities include:
Mobile check deposit
Person-to-person payments
Scheduled and recurring bill payments
Secure messaging with relationship managers
Deposit Insurance
Axos Business Interest Checking comes with FDIC insurance up to the current limit of $250,000. If Axos Bank fails, the federal government protects balances up to this amount.
Pros & Cons
Axos Business Interest Checking has some clear upsides and some just-as-obvious downsides.
Competitive interest rate on eligible balances
Unlimited domestic ATM fee reimbursements
Full suite of business banking services
$10 monthly fee without waiver
No rewards program
Tight monthly transaction limits
Pros
Axos Business Interest Checking is an interest-bearing checking account with some potentially valuable perks.
Competitive interest rate. Axos Business Interest Checking has one of the better interest rates of any business checking account. It’s right up there with the top consumer high-yield checking accounts.
Unlimited domestic ATM fee reimbursements. Axos Bank reimburses U.S. ATM fees without any dollar value or transaction caps. This is a big advantage over business bank accounts that limit reimbursements or don’t offer them at all.
Free paper checks when you open your account. You get 50 free paper checks when you open your account, which should be enough to see you through weeks if not months of regular business.
Full suite of business services without an in-person appointment. Unlike many online business banks, Axos Bank is a full-service financial institution with loan officers, treasury management specialists, and other human banking experts.
Cons
Axos Business Interest Checking is missing some important features and isn’t particularly friendly to budget-conscious entrepreneurs.
No rewards program. This account has no debit card rewards program and no real purchase perks. In other words, there’s no way to earn a return on everyday business spending.
Tight limits on free monthly transactions. You get just 50 free transaction per month with this account. After that, each transaction costs $0.50. The one exception is remote check deposits, which come with their own limit of 60 per month. But any transaction limits at all are unwelcome in a small-business account (and increasingly uncommon in the space).
$10 monthly maintenance fee without waiver. This account has a $10 monthly maintenance fee. To get it waived, you need to maintain a minimum daily balance of $5,000, which could be tough for very small businesses.
Limits on external integrations. This account has just one external integration of note: QuickBooks. Many otherwise similar accounts integrate with a dozen apps or more, spanning e-commerce, workplace productivity, payments, and other important business processes.
How Axos Business Interest Checking Stacks Up
Before you apply for an Axos Business Interest Checking account, see how it compares to similar small-business checking accounts. Novo Business Checking offers an illuminating head-to-head.
Axos Business Interest Checking
Novo Business Checking
Monthly Fee
$10
$0
Monthly Fee Waiver
$5,000 minimum daily balance
Not needed
Minimum Balance
$100 to open, $0 ongoing
$50 to open, $0 ongoing
Integrations
Yes, QuickBooks only
Yes, about a dozen including Stripe, Amazon, and Shopify
Invoicing
No
Yes, built into the app
Budgeting Tools
No
No
Yield
Up to 1.01% APY
None
ATM Access
Unlimited in the U.S.
Unlimited worldwide
Axos Business Interest Checking’s biggest advantage is its yield on all balances (and its very competitive yield on balances up to $20,000). Elsewhere, Novo Business Checking offers better value thanks to built-in invoicing tools, a dozen third-party integrations, and no monthly fee.
Final Word
There’s more to Axos Business Interest Checking than the typical online small-business checking account. That’s mainly down to Axos Bank’s full spectrum of business banking services rather than anything special about this account itself.
In fact, Axos Business Interest Checking has some important downsides that should give you pause. The monthly fee and transaction limits are problematic for cash-strapped and high-volume businesses, respectively, and this account lacks some potentially useful features (like extensive third-party software integrations) found elsewhere. Axos Business Interest Checking could be the best business banking option for you, but be sure to see what else is out there before deciding for sure.
The Verdict
Our rating
Axos Bank Business Interest Checking
Axos Bank Business Interest Checking is an excellent choice for business owners looking to earn interest on day-to-day balances while benefiting from direct access to human banking professionals. Unlimited domestic ATM withdrawals and 50 free paper checks don’t hurt either. But this account has some glaring downsides, like tight transaction limits and no debit card rewards, so it’s worth seeing what else is out there before applying.
Editorial Note:
The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
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Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he’s not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.
Banking
4 Different Types of Bank Accounts Explained
Choosing your first bank account isn’t always simple. There are loads of new bank account offers to choose from, each promising different features and perks. How can you tell which one is right for you? Learn about the different types of bank accounts and the key benefits and drawbacks of each.
There’s more to banking than low monthly fees, high yield savings, and a large ATM network. More Americans today seek banks and credit unions that align with their values when it comes to sustainability and social responsibility.
The U.S. banking system tends to disregard lower income and rural communities, with traditional banks establishing multiple branches in the country’s largest and wealthiest cities. The most socially responsible banks, on the other hand, provide online banking, low monthly fees, and no minimum deposit requirements, making them accessible to lower income individuals and families. They may also support efforts to help lower income individuals qualify for personal loans, auto loans or mortgages at fair interest rates.
But that’s not all that comes with socially responsible banking. Socially responsible banks emphasize financial literacy for those in their local community. They might also consider their organization a green bank, committed to fighting climate change and avoiding projects that support fossil fuels.
10 Best Socially Responsible Banks and Credit Unions
The best socially responsible banking institutions combine sustainability, accessibility, transparency and ethics to help make the world a better place. Yet, you won’t sacrifice top-notch personal checking and savings or even high-quality business banking when you choose one of the financial institutions on our list. You can have the best of all worlds – and do what’s best for the world – by choosing a socially responsible bank or credit union.
1. Aspiration: Best for Online and Mobile Banking Services
Aspiration is not a bank. But it’s one of the best cash management accounts offered anywhere online, with no monthly fee and a host of money management features. The Aspiration Plus Spend Save account that offers 3% interest on savings.
Aspiration is a certified B-Corp that shows its commitment to socially responsible banking with a variety of programs. Aspiration will plant a tree each time you round up a debit card purchase to deposit the difference in your Save account. It pays 3% to 5% cash back on debit card purchases with companies that are members of the Conscience Coalition, a group of small businesses devoted to social responsibility and sustainability.
Aspiration offers two accounts: One asks members to “Pay-What-Is-Fair,” which means you can use the account for free if you choose. Aspiration Plus costs $7.99 monthly or $71.88 annually (save $24 when you pay upfront.) Save accounts in the Pay What Is Fair model earn 1% APY, while Aspiration Plus savings accounts earn 3% APY.
2. Amalgamated Bank: Best for Investment Planning
Amalgamated Bank has branch locations in the nation’s largest cities: Boston, New York, San Francisco and Washington D.C. The bank offers personal checking and savings accounts with no monthly fees.
Amalgamated Bank offers four checking account tiers, including three interest bearing accounts. Two of the accounts have no minimum opening deposit. If you choose the interest earning Give-Back Checking account, you’ll earn a high APY of 0.90% – 0.95%, with an additional contribution of one-half of your interest earnings going to the charitable organization of your choice.
In addition to its choices in checking and savings accounts, Amalgamated Bank stands out when it comes to helping new retail investors choose ESG companies to invest in and plan for their future.
3. Spring Bank: Best for New Yorkers
Hailed as New York’s first B Corp bank, Spring Bank offers personal and business banking online and at branches in Harlem and the Bronx. The Green Checking account offers no monthly fee with direct deposit, paperless statements and no overdraft fees. If you need an account to write checks, you’ll want to choose the Basic Checking account.
Spring Bank deposits are insured by the Federal Deposit Insurance Corporation, up to $250,000 per depositor, per account. But the bank works with the IntraFi Network to also insure multi-million dollar deposits across multiple reputable U.S. banks.
Spring Bank offers CDs with terms from 90 days up to five years with a minimum deposit of just $250 and interest rates ranging from1.50% APY up to 3.25% APY. The bank also has a high-yield Vacation/Club savings account for short-term savings.
Spring Bank ranks in the top 5% of all 3,000 B Corps across the world and earned awards for its Governance and Customer Service in 2022. The company strives to provide affordable financial products, enabling its customers to avoid what it calls “fringe” financial products like check-cashing services and payday loans.
The bank also supports small businesses in New York and beyond with business checking accounts, money market accounts, and business loans.
4. Beneficial State Bank: Best for West Coast Residents
With seven locations across California, Oregon, and Washington, Beneficial State Bank is the B Corp bank of choice for those on the West Coast. The bank’s majority owner is Beneficial State Foundation, a nonprofit organization serving the public interest.
Beneficial State Bank offers three checking accounts, all with a $50 minimum opening balance and a low monthly service charge. eChecking waives the monthly fee if you sign up for eStatements. Checking and Interest Checking products have low monthly service charges that are easy to waive if you meet certain criteria. The bank also has savings, money market, CD, and IRA accounts to help you meet your long-term and short-term savings goals.
With an emphasis on ethical, equitable banking, Beneficial State Bank is a green bank that does not support or lend fossil fuel companies. The bank shows where every percentage of your deposit goes and says that 75% of its lending occurs within its mission categories. The other 25% supports other categories, but never to projects or organizations that cause harm to the planet or the people on it.
Some of the bank’s top lending categories for businesses and consumers include environmental sustainability, affordable housing, auto loans with fair interest rates, and health and well-being. The bank is also a preferred lender for clean vehicle programs in the state of California.
5. City First Bank, A Subsidiary of Broadway Federal Bank: Best for Commercial and Nonprofit Banking
City First Bank is part of a family of companies devoted to socially responsible lending and personal and business banking in low to moderate income communities. City First Bank, based in Washington, D.C., is a black-led, minority depository institute (MDI), as well as a B Corp and a member of Global Alliance for Banking on Values.
City First Bank offers a variety of personal and business banking products, as well as accounts for nonprofit organizations. The personal checking account has no monthly fee if you meet any of four criteria:
One monthly direct deposit
10 debit card transactions
eStatement enrollment
Minimum monthly balance of $100
The bank also offers a personal savings account, CDs, money market accounts and savings accounts for minors.
6. Sunrise Banks: Best for Mortgages
Sunrise Banks offers a full range of personal banking products, including personal checking, savings accounts, credit cards, and a pre-paid Mastercard. But it is best known for its Pathway2Home affordable mortgage product, as well as other mortgages with down payments as low as 3%. The bank also writes VA loans with no down payment required.
By supporting affordable housing and helping Minnesota residents get into homes of their own and begin building generational wealth, Sunrise Banks shows its commitment to socially responsible banking. Like many of the socially responsible banks on this list, Sunrise Banks is a member of GBAV, a Community Development Financial Institution, and a B corporation.
7. Clean Energy Credit Union: Best for Clean Energy Loans
Most of the banks on our list support efforts to reduce climate change, do not help fund or support fossil fuel companies, and run their organization sustainably. Clean Energy Credit Union works to fund renewable energy through personal loans for electric bicycles, solar electric systems, geothermal heat pump systems, and green home improvements. Clean Energy Credit Union also offers auto loans for electric vehicles.
While the credit union specializes in funding renewable energy and other loans, it also offers options for personal checking and savings accounts. Checking accounts offer dividends from .01% APY to 3.56% APY with a minimum opening balance of just $25 and no monthly fees if you meet certain requirements, including having a Clean Energy loan.
Savings accounts include a bank account with a 0.15% APY and a minimum opening deposit of $100, certificates, and a money market account with dividends ranging from 0.95% up to 1.61% APY, with a minimum deposit of $2,500.
As part of its commitment to green living, the credit union offers bio-based, compostable debit cards that are eco-friendly. It is also one of the few banks or credit unions on our list that offers a Carbon Zero Teen Account online, which shows your teen the carbon offsets their deposits can fund.
8. National Cooperative Bank
National Cooperative Bank offers high yield CDs, and money market accounts, as well as checking and savings accounts and business products. The bank offers an interest earning checking account with a 0.90% APY and no minimum opening deposit. There is a $15 monthly fee if the balance falls below $500.
The money market account has a high 2.28% APY, with a minimum balance of $5,000 to avoid the $25 monthly fee. You will need just $100 to open the account. You can earn a 4.34% APY on with a 12-month CD with a $2,500 minimum opening deposit.
While the bank is committed to helping its customers earn money through high interest rates, it is equally committed to its duties as a socially responsible bank. The bank has donated $8 billion to support underserved communities nationwide, and provided loans and investments of $475 million to low and moderate income families, including mortgage loans.
9. Clearwater Credit Union: Best for Previously Unbanked Consumers
Clearwater Credit Union is a certified Community Development Financial Institution and a member GBAV. While most credit unions are devoted to serving their local communities, Clearwater takes it a step further by donating $1.6 million to 290 non-profit organizations in 2022. Employees donated more than 1,340 volunteer hours within their local communities, and the credit union awarded $20,000 in scholarships to students in the credit union’s home state of Montana.
Clearwater CU offers multiple choices in bank accounts, including a basic checking with no monthly fee, a premium checking that pays dividends, and a SmartSpend checking account with a low, $5 monthly fee for previously unbanked consumers.
The SmartSpend account can help lower income individuals and families avoid the fees that come with check cashing services or prepaid debit cards. It also gives them the opportunity to avoid overdraft fees while gaining the convenience of a deposit account, debit card, and access to mobile banking.
10. Carver Federal Savings Bank: Best for Small Business Banking
Many of the banks on our list devote time and money to sustainability, equality, and other social causes. But they don’t necessarily offer the highest interest rates available in online banking today. Carver Federal Savings Bank, however, is a Black-operated, socially responsible bank that also delivers high-yield savings of 4.00% APY.
But there is a catch. You’ll need a $5,000 minimum opening deposit. This might make the Carver savings account inaccessible to many in underserved communities seeking personal checking and savings accounts. However, for those on firm financial footing who want to support a socially responsible bank, Carver’s high yield savings is a solid choice.
Beyond the high yield savings, Carver is known for an array of checking and savings products for small business owners, including a money market account with 2.00% APY and a business interest checking account.
Start-up businesses or those with low-to-moderate balances might prefer the Carver Community Business Free Checking with no minimum balance, no monthly fee, and 200 free transactions per month. The bank focuses on Black- and Minority-owned businesses as well as women-owned businesses across New York City.
Carver is a designated CDFI and has reinvested 80% of every dollar deposited into NYC communities. It also donated $149 million in New Market Tax credit and more than $259 million in leveraged loans across the New York metro area.
How to Choose Socially Responsible or Sustainable Banks and Credit Unions
When you’re shopping around for a socially responsible bank, first consider what aspects of ethical banking are most important to you. Are you looking for a bank committed to serving low income communities, or one that puts a focus on renewable energy? Maybe sustainability is the most significant aspect to finding a socially responsible bank that aligns with your values.
Of course, you also want to think about all the other elements that you would consider for your personal banking needs. These include low fees, online banking capabilities and an intuitive mobile app, early availability of your direct deposits, and a high yield savings account.
Our list of the best socially responsible banks takes all these factors into consideration and showcases banks that back up their values with investments – in their communities and in the environment.
Organizations That Support Sustainability and Social Responsibility
The best socially responsible banks often showcase their commitment to ethical banking through certifications or membership in organizations that support and reflect their values. If a bank is a member of the Global Alliance for Banking on Values, recognized as a community development financial institution (CDFI) or a Certified B corp, you know the bank has demonstrated its commitment to ethical banking.
Global Alliance for Banking on Values (GABV)
The Global Alliance for Banking on Values (GABV) is a worldwide network of socially responsible banks committed to ESG values. GABV banks focus on three pillars:
Finance change
Do no harm
Sustainable products and services
To join the Global Alliance for Banking on Values (GABV), banks must show their commitment to sustainability, and have a balance sheet of at least $50 million. They must be a full service bank and show financial stability and stable governance. Many of the best socially responsible banks are members of the Global Alliance for Banking on Values (GABV).
Community Development Financial Institutions (CDFIs)
A Community Development Financial Institution is a bank, cash management account, or credit union that is certified by the U.S. government. It’s a bank that has shown a commitment to providing banking services in low income communities and underserved communities across the U.S.
Unlike many other financial institutions, Community Development Financial Institutions focus on areas such as economic development, affordable housing and supporting small businesses in their local community.
Certified B Corp
A Certified B Corp is any organization or socially responsible financial institution that successfully balances purpose and profit. Organizations can apply for B Corp certification if they demonstrate transparency, social responsibility, and show high social and environmental sustainability standards. Banks and credit unions must pass rigorous certification standards to become recognized as a B Corp.
FAQs
Still have questions about the best socially responsible banks? Check out some commonly asked questions below.
Which banks are eco-friendly?
Many U.S. banks meet eco-friendly requirements in a variety of ways. Some, like Clean Energy Credit Union, refuse to support fossil fuel companies. Aspiration plants a tree whenever customers round up their debit card purchases to deposit into a savings account.
To find eco-friendly banks, you can look up their ESG (Environmental, Social & Governance) ratings on their websites, in their financial statements, or on a website like Sustainalytics.
Remember, ESG ratings are derived from many factors, including a company’s diversity & inclusion practices, sustainability, charitable donations, and more. You may have to dig deeper to see which banks employ sustainable practices to reduce their carbon footprint.
How Can You Determine Which Banks Are Committed to Ethical Banking?
A search on a company website should help you find the best socially responsible banks committed to ethical banking. Check online to see if the bank helps underserved communities or the unbanked or underbanked population. Ethical banks may be recognized as a community development financial institution.
What is responsible banking?
Responsible banking or ethical banking typically focuses on three key areas:
Banking access and community development
Environmental impact and climate change
Holistic social responsibility
What is an ESG bank?
An ESG bank focuses on environmental sustainability, social responsibility and ethical governance.
KeyCorp in Cleveland has provided a $20 million line of credit to Lendistry, a Los Angeles-based, minority-led community development financial institution. The deal represents the biggest single commitment to date for the CDFI lending group Key launched in November 2021, according to Bryan Maddox, the $195.2 billion-asset bank’s national team leader.
Lendistry “is the largest CDFI we’ve worked with,” Maddox said. “It warranted our ability to leverage up and do more of an investment…Lendistry has tremendous depth to be able to work with clients and potential borrowers on multiple levels.”
Small businesses aren’t the CDFI group’s exclusive focus, but it’s a growing area of interest, according to Maddox. “We’ve probably invested in three or four CDFIs in the last year-and-a-half that concentrated on small-business lending.”
In March, Maddox’s Community Development Financial Institutions Group extended a $10 million line of credit to Boston-based Arctaris Impact Investors to support its small-business lending.
Founded in 2014, Lendistry has made more than $9.4 billion in loans and grants in support of more than 622,000 small businesses. The relationship with Key will serve as a “resume-builder” as Lendistry seeks to expand involvement in the growing State Small Business Credit Initiative and similar programs, CEO Everett Sands said.
“As the government thinks about granting Lendistry more funds and adding us to more programs, ‘Can you handle it,’ is a natural question,” Sands said. “We can say, ‘Look at what we just did with Key.'”
The line of credit also serves as a hedge against an economic downturn. “When you’re entering a tightening credit market, you want to make sure you have multiple partners. I look at it as a fiduciary responsibility,” Sands said.
Key is a significant small-business lender on its own, ranking among the nation’s top 20 Small Business Administration 7(a) lenders. Through July 5, Key had closed 665 7(a) loans for $168.3 million, according to SBA. (Under 7(a), SBA guarantees small-business loans made by banks and other participating lenders.)
Lendistry can help Key reach businesses that don’t fit into a conventional bank credit box, even with a credit enhancement, Sands said. Sands cited airport vendors, startups and businesses that sell through Amazon.com as examples. “There are several deals that we do in the CDFI world that don’t necessarily meet the standardized traditional lending” parameters, Sands said.
According to Maddox, Lendistry has been on Key’s radar for some time. “As we started to identify opportunities across the country and kept hearing Lendistry is involved in this, or Lendistry was involved in that, it only made sense to learn a little bit more about what they were doing,” he said.
Maddox characterized the $20 million line of credit, first announced last month, as an opening act in what he believes will grow into a deeper, ongoing relationship. “This fits squarely into the charge we have as a CDFI lending platform,” Maddox said. “It certainly helps with our [Community Reinvestment Act] commitments, but also it’s the right thing for us to do.”
“I see big things for Everett and his team in the future,” Maddox said. “We want to be able to help provide capital for that growth. It started [with the line of credit] but we believe it will be a lot larger in the near future.”
While Key has received 10 outstanding ratings on CRA exams, some community groups have asked regulators to investigate how well the company complied with a $16.5 billion-asset community benefits agreement negotiated as part of its 2016 acquisition of the $40 billion-asset First Niagara Financial Group. In May, Key agreed to undergo a third-party racial-equity audit to be conducted by law firm Covington & Burling.