Socially responsible investing, which now makes up 10 percent of overall investments in the U.S. market, has a new sub-segment, the “green” bank. Peter Liu founded the first explicitly green bank in the United States to fit a market opportunity as much as a social one. “We believe that we are evolving from what was yesterday a social movement into a market opportunity. That’s what we are engaged in–a market-expansion exercise.”
The New Resource Bank acts like a typical bank with a green conscience. Individuals, companies, and even the state of California have checking and savings accounts with the San Francisco bank, which then makes loans to green developers, organic food companies, sustainable businesses, and homeowners looking to go solar.
Liu claims that fragility of the current market has reversed the trade-off between social betterment and financial gain. Green banks provide depositors the rare opportunity to safely leverage their money in support of their values since since all green banks (conforming to the guidelines of conventional banks) are FDIC-insured.
New Resource has proved a worthy depository, attracting $166 million in deposits as of last June (nearly double from the previous year) and making just shy of $100 million in loans. Last summer, Liu raised $14 million from investors, despite the beginning atrophy of Wall Street.
Liu speaks the language of most social entrepreneurs who see severe limitations in conventional systems. “The hurt for doing the conventional things is getting greater and greater.” As the markets recover, “Green should be associated with better performance.”
I first read about New Resource Bank in Ode Magazine’s December issue.
I'm Olivia Khalili. I created Cause Capitalism to show you how to grow your business by incorporating a social mission. 
While New Resource Bank is a great institution, the claim that it was the first bank of its kind is not quite true. New Resource Bank was modeled explicitly on Shorebank Pacific (http://www.eco-bank.com/) in Oregon. Peter, much to his credit, is just much better at publicity than the folks at Shroebank. Here is a link to 10 places to park your cash that are sustainable in some way. NRB and Shorebank are on there, among others (http://www.hipinvestor.com/wp-content/uploads/hipplacestoparkyourcash.pdf).
Jeff, thanks for the comment. I’ve been following SRI for a couple of years and will definitely check out hiplacestoparkyourcash (great name!) at hipinvestor. What’s your connection to green banking? Investor, recipient, expert, employee? Thanks again for the links.
Just wanted to share that as of February 18th, 2011 Charter Oak Bank has been closed. Also, New Resource Bank charges checking account customers a $10/month fee if a minimum balance is not met. NOT cool for those of us who live paycheck to paycheck.