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Where does your bank invest the money you give it? Now you can find out

Is your money making meaningful investments in the community or just funding pipelines? Mighty Deposits lets you comparison shop banks’ behavior.

Where does your bank invest the money you give it? Now you can find out
[Source Image: nazarkru/iStock]
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What does your bank actually do with the money you deposit? Most customers don’t know—and while some progressive banks might use your cash to make loans for affordable housing or renewable energy, others might pour it into fossil fuels.

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A new website called Mighty Deposits is designed to help make banking more transparent, so customers can more easily find a bank that aligns with their own values. Typically, the founders say, customers might decide to leave a bank if it’s caught behaving badly—as in the scandal when Wells Fargo created millions of fraudulent accounts—but in terms of simple day-to-day activity that might not fit with your morals, it’s difficult to choose between alternatives. “What doesn’t exist is a shopping aisle for banks,” says Mighty Deposits founder and CEO Megan Hryndza. “It’s really good to understand your choices when you’re spending your money.”

At its launch, the site is beginning with data about how banks invest in communities. Banks are required to report this data by law in the U.S., making it well-suited for direct comparisons. “You can start to benchmark numbers that you hear in banking that are otherwise really hard to benchmark, you know, what does it mean for a bank to have a news headline that it did $4 million in small business loans in a community?” she says. While the data is publicly available, it’s not something that anyone can easily digest. There are more than 1.6 million pages of data reported annually just about loans and financing activity, she says.

[Screenshot: Mighty Deposits]

If you bank with JP Morgan Chase, for example, Mighty’s tool will inform you that the bank invests only 15% of your money in housing, 11% less than average, and only 1% in small businesses—80% less than average. The site will soon begin adding additional data from other sources. The law doesn’t require banks to report sustainability metrics, but Mighty’s team is working with data from nonprofits to add data about fossil fuel investments. (Another part of the site already lists banks that finance sustainability.) The site also lets users search for banks that are better-aligned with their own interests.

If the money banks hold was redirected to more socially-impactful investments en masse, it could make a meaningful difference: Hryndza says that the global impact investing market is reportedly around $500 billion, but “there’s 25 times more money held in deposits and banks than that. And so there’s an untapped potential for cash.” Someone could potentially choose to deposit money in multiple banks across the country to help support local communities. “You’re not actually spending any money, you’re not actually donating it,” she says. “You’re just changing your routing number. There’s minimal inconvenience in your life and it can have a tangible impact.”

The site will continue to evolve, and plans are in the works to add credit unions. Mighty decided to start with banks because that’s where most money is deposited. Banks may also begin to report data that they aren’t required to report by law, such as whether they finance private prisons. The site also wants to highlight banks that may not be marketing all that they do—a small bank that invests its money in local businesses likely isn’t investing in fossil fuels, but might not be advertising that fact. “We hope to be an asset in the industry to help people who want to communicate their impact tell that story,” Hryndza says.

About the author

Adele Peters is a staff writer at Fast Company who focuses on solutions to some of the world's largest problems, from climate change to homelessness. Previously, she worked with GOOD, BioLite, and the Sustainable Products and Solutions program at UC Berkeley, and contributed to the second edition of the bestselling book "Worldchanging: A User's Guide for the 21st Century."

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