The FDIC has their hands full these days. Over 250 banks have failed in the last two years and another 700 to 800 are reported to be on the FDIC’s list of “troubled” banks. The FDIC has to figure out how to pay for all those bank failures without bankrupting the insurance fund or tapping U.S. taxpayers for more money. The FDIC is also in the middle of the power struggle between the Federal Reserve and Congress over financial regulation. So perhaps it is not a huge surprise that the FDIC has been relatively quiet on pushing the banking community for implementing sustainable banking practices and socially-conscious lending. There is also the legislative issue. The FDIC by statute has to monitor and regulate that banks invest in their local community through the Community Reinvestment Act of 1977. If you read through the statute it is clear that there is no mandate for the FDIC to monitor the environmental policies of a bank. Here is what Congress tells the FDIC to monitor and regulate:
(a) The Congress finds that–
(1) regulated financial institutions are required by law to demonstrate that their deposit facilities serve the convenience and needs of the communities in which they are chartered to do business;
(2) the convenience and needs of communities include the need for credit services as well as deposit services; and
(3) regulated financial institutions have continuing and affirmative obligation to help meet the credit needs of the local communities in which they are chartered.
(b) It is the purpose of this title to require each appropriate Federal financial supervisory agency to use its authority when examining financial institutions, to encourage such institutions to help meet the credit needs of the local communities in which they are chartered consistent with the safe and sound operation of such institutions.
The FDIC does a good job monitoring the compliance of member banks to the Community Reinvestment Act (CRA). Imagine what could happen if the FDIC was mandated to also regulate the green policies or “non-green” policies of banks.
When the FDIC did issue a public comment about write about green banking it was geared towards bank consumers and not the banks themselves. What did they say? Here is the republished text from the FDIC’s Summer of 2008 issue of FDIC Consumer News Summer :
“Green” Banking: Saving the Environment as You Save and Borrow Money
You’re probably already recycling paper, glass and plastic. But did you know you also may be able to help save the environment as you do your banking? Here are options that may be available from your bank.
Paperless statements. Receiving monthly bank statements and credit card bills electronically instead of in the mail can save a lot of trees, “particularly when inserts and envelopes are factored in,” said Luke W. Reynolds, Chief of the FDIC’s Community Affairs Outreach Section. But because old statements may prove helpful during tax time or help substantiate a previous transaction, find out how long electronic statements will be available online to view and perhaps download to your computer. Also ask about the fees you’d pay if you need a paper copy of an old statement.
Electronic banking and bill payments. This includes conducting transactions over the Internet, via a debit or credit card, or using your telephone or cell phone instead of writing and mailing checks. But make sure you know what fees may be assessed for using these options. Also be careful to record electronic withdrawals in your checkbook, so you don’t inadvertently overdraw your account.
Automatic withdrawals and deposits. You may be able to pay utility bills and other routine, recurring transactions by having the funds automatically withdrawn from your checking account or charged to your credit card before the due date. Be sure, though, to review the bill each month for errors and record the transactions in your checkbook or personal finance software. Another option is to have your payroll or Social Security checks deposited directly into your bank account, which reduces paper and saves gas by cutting down on car rides to the bank or ATM.
Special financing. Some banks will offer a lower interest rate on a loan for energy-efficient cars or home improvements that will save energy. Why? “If the energy efficiencies can significantly lower a borrower’s monthly expenses, the lender may see the loan as less risky,” said Reynolds. “But don’t let an offer of ‘green’ financing stop you from shopping for the best rate.”
Buy less, save more. For example, consider new ways to reuse or borrow items instead of buying new ones. “You’ll help the environment by consuming less,” Reynolds explained. “But in addition, you can save more money that can go into a savings account for more important use.” Added Janet Kincaid, Chief of the FDIC’s Consumer Response Center, “Going green can help you save your green, silver and copper.”
