By Andy Mannle | Monday, 07 April 2008
One of the most exciting things to hit green financing is the country’s first ‘Green Bank’, and, as Arcwire found out in our interview with founder Peter Liu – it’s not just for the big guys. Now anybody can put their money in the green space – and use ATMs for free anywhere in the world!
We spoke with Peter Liu at the Aspen Environment Forum about how his bank is attracting deposits at a record rate, forming a community, and the role consumers have in changing the way banks do business.
“When we are a bank where the clients all have a similar interest and focus, then we become more than a bank.” - Peter Liu
Arcwire: What makes the New Resource Bank different from other banks that are greening up their footprint, or financing green investments?
This is not just part of what we do. We have a fairly laserlike focus on building sustainable resources, whether it’s by supporting green projects and companies, or when we take the green to our ordinary community clients. We give them monetary incentives to go green, and make money at the same time. And we are defining a brand that seems to be attracting deposits faster than any other bank in our vintage. So, so far - we’re still early - it’s proven to be economically successful for us as well.
Do you think this serves as a model for other companies? Are you affecting investment by companies and institutions?
I can only speak to examples, but so far we have grown from zero to almost $200 million in assets in a very short amount of time. And some of the lending programs that we pioneered on the solar side, have been emulated by big national banks. In the investment world there are no patents, you can’t patent how you invest, so people have to see success. If they see success then money will follow.
A year and a half after we opened we have banks call us up and say, ‘We’re going to open a bank just like yours in Austin, Texas, and can you help us, show us how you did it.’ And we’re happy to give people advice, and we’re happy to see big banks copy our programs, because that’s version 1.0, and we’re working on Version 2.0. Banking is a $20 trillion business, so we have lots of room to grow.
And in terms of ‘Green Banking’ how big a business is that?
Well hopefully one day it’ll be 100%. Part of the challenge goes out to consumers as well. The more people say, ‘I don’t have to take my banking for granted,’ the more banks will become greener. We have lots of clients that move from the national banks to us because they say, ‘Hey I do all these things that are green, I support environmental groups, I do recycling, I take all these actions, that sometimes are a lot more intensive than switching a bank.’
They switch to our bank and get great service and get an ATM card that can let them use any ATM machine in the world for free. So they’re saying ‘hey, the banking is just as good if not better, and now my money is working in a similar way towards my values. That’s what finally kind of makes sense and so in terms of getting more and more of the banking sectors to go that way, part of the burden is on the shoulders of the consumers. They have to care enough to say, ‘I’ll either switch my bank to them, or I’m going to ask my bank why are you involved in these destructive practices.’
So if I’m just an ordinary customer and I want to start a checking or savings account, I can come to New Resource Bank and start one?
Absolutely. We have lots of individual consumer banking clients from as far off as Paris, London, New York, Tennessee, Missouri, Virginia, Colorado here, Illinois, Washington state, Oregon, California….
And you guys do the automatic bill pay?
I can go to any ATM for free?
Any ATM for free.
I can go online and check my balances and everything?
Online for free, yes.
No, we actually have lots of retail clients. Every year we invite them to come to the bank to sample what our clients do. So we had our first meeting where clients came in and got to taste icecream from Strauss Family Creamery, an organic family dairy. Of course we can’t give away free solar panels from our customers, that’s too expensive, but they do get to be part of a community. When we are a bank where the clients all have a similar interest and focus, then we become more than a bank.
We connect clients with partners, with purchasing options, or sometimes with equity investors if they need capital that we can’t provide. It’s easy for us to identify who is a fit because we know our clients came to us with a choice, with a certain identification, so we can be more value-added to them.
So say I have $10K or an IRA or something, I’m looking to get in, I can see that the green economy is going to huge, but I don’t know exactly what to do, how can you guys help?
You can deposit it with us. A bank deposit is obviously not going to make you rich. It’s a safe investment, it’s fully insured by the federal government, so it’s a risk-less way to become a green investor. No risk. Obviously the other options are investing in stocks, or solar companies, a private equity or start-up. But those are potentially very risky. So in some ways this is a no-brainer start to becoming a green investor.
Do you have a fund or anything that’s the next step up in terms of interest earnings, yet still safe?
We don’t. We do have pretty attractive rates. In fact, we target our interest rates to be at a premium with some of the biggest banks in the country that we compete against. Because in some ways we attract deposits with more efficiency than they do. We don’t have a branch in Paris, but we have a client there. We don’t have a branch in New York, and we have dozens of clients from New York City.
So one final question. People want to deposit money with you, banks want to work with you, other companies – how do you determine whether they really are green?
We’re not allowed by our banking regulators to only serve green clients. That would be discriminatory from an FDIC insurance standpoint. So if a non-green customer comes to us, that’s right next store to us, and says I want a loan, if he has very good credit, we can’t turn him down. However, we can do things like what we’re doing in real-estate lending.
If you’re a community developer, you come in to borrow money from us, we will judge you on the credit merits with no discrimination. But we will give you one price for building conventional and if you want to build to green leadership level, we will give you a better price. Lower interest rates, lower fees - to incentivize you, to make it worth your while to go green.
And are a lot of companies doing that, shifting their practices because of the opportunities?
Yes, we definitely have clients that are turning that way. And then we can add more to that, we can add education. Every year when there’s a big greenbuilding conference in San Francisco, we always bring some of our clients there to try to educate them and show them that green can be just as beautiful, just as strong, and in fact more marketable as a product.
Excellent Peter, thank you very much for your time.