A Beneficial Bank Born During a Banking Crisis

This post celebrating timeless values for small business is brought to you by GOOD, with support from UPS. We’ve teamed up to bring you the Small Business Collaborative, a series sharing stories about innovative small businesses that are changing business as usual for their communities and beyond.

This post celebrating timeless values for small business is brought to you by GOOD, with support from UPS. We’ve teamed up to bring you the Small Business Collaborative, a series sharing stories about innovative small businesses that are changing business as usual for their communities and beyond. Learn how UPS is helping small businesses work better and more sustainably here.

It was July 2007. The housing bubble was about to burst. The subprime mortgage crisis that would precipitate the Great Recession was at very edge of falling into its downward spiral. Kat Taylor, her husband Tom Steyer and a team of politically frustrated, financial experts were launching a triple bottom line bank. They planned for a foundation that would hold the economic rights to the bank and by mandate, would reinvest all profits in the local community and environment.

It was a crazy time to start a bank, but perhaps just the right time to build one that prioritized community right alongside profits—rather than the model so many would come to disdain that pursues profit at all costs.

One PacificCoast Bank (then called OneCalifornia Bank) opened in Oakland, California, modeled after socially conscious financial institutions like Chicago’s ShoreBank and Muhammad Yunus’ Grameen Bank. Initially, the bank aspired to support its community by building a mortgage strategy, because as Taylor puts it, “for many, many families, homeownership is the only wealth-building tool they will ever have. . . we intended to be a mortgage lender in our own way, but we never had the chance.” Only one of the bank’s mentors, Martin Eakes, Self Help Credit Union’s CEO, read the tea leaves accurately. Taylor remembers, “He showed us the rate sheets where there’s all sorts of fraudulent stuff going on, and he said, ‘Hold onto your hats.’ And sure enough, we became a bank… and then we watched the credit market burn down around us.”

Mortgage markets tanked. Instead of helping families invest their money in new homes, the new bank spent 18 months and one million dollars trying to design a foreclosure prevention program. But that was when, as Taylor puts it, “the banks were still in denial. They had been disobeying basic underwriting for a long time and nobody was going to get them to admit that they’d had a hand in this at that time.” One PacificCoast Bank attempted to invest its money as a “silent second” investor in mortgages, as leverage to get banks to modify their terms. “We tried very hard,” as Taylor puts it, “but couldn’t get one done. You’d think if you were waving money around like that…” She sighs. Instead, One PacificCoast Bank lent in distressed neighborhoods dotted with foreclosed properties, helping for-profit and nonprofit entities renovate housing stock to stop blight—with a goal of getting foreclosed homes back on the market at affordable rental rates or with reasonable lease-to-own situations.

A certified Benefit Corporation, One PacificCoast Bank finances community-based businesses, with about 75 percent of its commerical customer loans going to organizations focused on overtly impact-related sectors. Ashara Ekundayo, co-founder and chief creative officer at co-working space Impact HUB Oakland, called One PacificCoast Bank “an amazing resource in our community. As a very diverse and very non-traditional group of social entrepreneur founders with a commitment to economic and cultural equity, at Impact HUB Oakland it was very important to us to partner with a financial institution that was also committed to not doing business as usual.” It’s not the same many of us would say about our banks.

And because its profits were designed to only be distributed through One PacificCoast Foundation, the community is the shareholder the bank serves, not the special interests of any one group. This year alone, the Foundation will give away $100,000 in sponsorships of organizations and their events, all while supporting organizations that promote financial literacy, hosting events for youth like one through Game Theory Academy, working with other credit counseling agencies, grant-making, and running impact evaluations to ensure the bank’s investments are bearing fruit in the community, sustainably.

One PacificCoast Bank has also been working to create an alternative to dodgy and exploitative payday lenders, through its pilot Pac Pal program. Through the one-year pilot, $1.1 million was loaned to 1,100 borrowers who found an easy and more manageable alternative to payday loans, pawn shops or auto title loans. The product will relaunch in 2014.

While One PacificCoast Bank grew in its ability to support its community, the financial crisis was taking down established banks all across the country. A number of Community Development Financial Institutions (CDFI), as Taylor puts it “really started tripping on the curb, because they tend to not be well-capitalized.” The CDFIs were mission-based, but had low returns because they often lend to the low-income communities that the Recession disproportionately hit.

“We recognized that we really need a strong sector of honest community banks, and we didn’t want to just stand by and watch banks go down.” One PacificCoast Bank changed its moniker from OneCalifornia Bank when it negotiated to buy (and salvage) ShoreBank Pacific before its parent company closed. In Portland, Albina Community Bank made it through the downturn, but like many other small CDFI’s was under-capitalized. One PacificCoast Bank is in an agreement to buy, when approved, 90 percent of new stock issued by the bank to recapitalize it. Albina will operate autonomously—because a community bank’s strength is its local ties.

That sort of values-first perspective is vital to many of One PacificCoast Bank’s customers. An upgrade in mobile offerings this fall is timed to reach a new Millennial customer base and affinity credit cards allow another 2,000 to 2,500 customers to support organizations like the Sierra Club and Salmon Nation. Taylor says they’ve seen considerable support from financial reformists, young people and mission-minded people who are coming to see that if financial reform doesn’t start at home, it can certainly begin just down the road, at a community-minded bank.

Image via Flickr (cc) user Sam Beebe

Julian Meehan

Young leaders from around the world are gathering at the United Nations Headquarters in New York Saturday to address arguably the most urgent issue of our time. The Youth Climate Summit comes on the heels of an international strike spearheaded by Greta Thunberg, the 16-year-old climate activist from Sweden, who arrived in New York via emissions-free sailboat earlier this month.

Translated from Swedish, "berg" means "mountain," so it may feel fated that a young woman with Viking blood in her veins and summit in her name would be at the helm. But let's go out on a limb and presume Thunberg, in keeping with most activists, would chafe at the notion of pre-ordained "destiny," and rightly so. Destiny is passive — it happens to you. It's also egomaniacal. Change, on the other hand, is active; you have to fight. And it is humble. "We need to get angry and understand what is at stake," Thunberg declared. "And then we need to transform that anger into action."

This new generation of activists' most pernicious enemy is denial. The people in charge — complacent politicians and corporation heads who grossly benefit from maintaining the status quo — are buffered from real-life consequences of climate change. But millions of people don't share that privilege. For them, climate change isn't an abstract concept, but a daily state of emergency, whether it comes in the form of "prolonged drought in sub-Saharan Africa…devastating tropical storms sweeping across Southeast Asia, the Caribbean and the Pacific…[or] heatwaves and wildfires," as Amnesty International reportsare all too real problems people are facing on a regular basis.

RELATED: Greta Thunberg urges people to turn to nature to combat climate change

Keep Reading Show less
The Planet

Millions of people in over 150 countries across the globe marched for lawmakers and corporations to take action to help stop climate change on Friday, September 20.

The Climate Strikes were organized by children around the world as an extension of the of the "Fridays for Future" campaign. Students have been walking out of classrooms on Fridays to speak out about political inaction surrounding the climate crisis.

"We need to act right now to stop burning fossil fuels and ensure a rapid energy revolution with equity, reparations and climate justice at its heart," organizers say.

There's no doubt the visual images from the marches send a powerful message to those on the ground but especially those watching from around the world. GOOD's own Gabriel Reilich was on the scene for the largest of the Climate Strikes. Here are 18 of the best signs from the Climate Strike march in New York City.

Keep Reading Show less

September 20th marks the beginning of a pivotal push for the future of our planet. The Global Climate Strike will set the stage for the United Nations Climate Action Summit, where more than 60 nations are expected to build upon their commitment to 2015's Paris Agreement for combating climate change.

Millions of people are expected to take part in an estimated 4,000 events across 130 countries.

Keep Reading Show less
The Planet
via Apple

When the iPhone 11 debuted on September 10, it was met with less enthusiasm than the usual iPhone release. A lot of techies are holding off purchasing the latest gadget until Apple releases a phone with 5G technology.

Major US phone carriers have yet to build out the infrastructure necessary to provide a consistent 5G experience, so Apple didn't feel it necessary to integrate the technology into its latest iPhone.

A dramatic new feature on the iPhone 11 Pro is its three camera lenses. The three lenses give users the the original wide, plus ultrawide and telephoto options.

Keep Reading Show less
via I love butter / Flickr

We often dismiss our dreams as nonsensical dispatches from the mind while we're deep asleep. But recent research proves that our dreams can definitely affect our waking lives.

People often dream about their significant others and studies show it actually affects how we behave towads them the next day.

"A lot of people don't pay attention to their dreams and are unaware of the impact they have on their state of mind," said Dylan Selterman, psychology lecturer at the University of Maryland, says according to The Huffington Post. "Now we have evidence that there is this association."

Keep Reading Show less