The Choice of Banking Green

In 2008, Jon Levey and Steve Sherman, both former LaSalle Bank lenders, and Steve’s father Harold Sherman, a long-time Chicago-area community banker, began pursuing a dream to develop a community bank that would re-shape how banking is done, with an emphasis on environmental sustainability. Despite a tumultuous time in the lending industry, GreenChoice Bank, calling itself the Midwest’s first holistically sustainable community bank, has opened two locations in the Chicago suburbs with its first city location slated to open later this year.

To Levey, both a banker and Leadership in Energy and Environmental Design Accredited Professional (LEED AP), the idea of an environmental friendly bank is more than a branding concept. GreenChoice Bank walks the walk, offering special higher interest rates to customers who go paperless and debit cards made of 100% recycled plastic. It encourages and rewards employees who use public transportation or drive hybrid cars. Acquired bank branches were retro-fitted to meet standards for LEED EB registered rehabs, with high-efficiency lighting and plumbing fixtures, high recycled content in flooring and counter finish products, refurbished office furniture, non-Volatile Organic Compound (VOC) paint, reclaimed walnut planks from an old turkey farm and a reclaimed office panel system to create new offices and conference rooms.

We recently spoke with Levey about the timing of the GreenChoice launch, the idea of being more than just green in name and his hopes for leading a branch revolution that will promote ecological sustainability.

Q: The idea of starting a “green” bank could very easily have been perceived as a branding stunt in the always competitive Chicago lending arena. Yet your two branches are truly green in nature. What are you trying to accomplish with GreenChoice Bank?

Levey: In my opinion, banks have gotten away from their true responsibility to the community, which we believe should be investing in the local economy and treating customers as people and not just account numbers. There was a growing need for a better relationship between banks, the public they serve and their collective impact on the planet.

In 2010, we acquired Family Federal Savings of Illinois, which had a respected 100-year history of serving its community. We invested most of 2010 into re-engineering the business to GreenChoice’s standards. This involved retrofitting its two branch locations and applying for LEED EB certification, introducing online and other electronic banking capabilities and launching a cultural change to incorporate sustainability initiatives throughout the business.

As a partner with the sustainable business community, we understand the challenges of trying to be a better and more responsible business because we’re going through the same process. GreenChoice Bank will always strive to be both a better corporate citizen and more innovative – with our people, products, investment decisions and infrastructure all dedicated to meeting our mission of sustainability every day and for the long term.

Q: You opened during a time when multiple banks in the Chicago area were failing. What were your concerns regarding the timing of the launch and how tempted were you to alter your plans for a truly green bank?

Levey: The timing did make securing and launching this venture a challenge, but we never wavered from our goal to create a forward-thinking, sustainably-minded community bank. With that concept on the drawing board, we began the de novo bank approval process in 2008. As the economy collapsed and the need for community banks increased, we forged ahead and earned regulatory approval from the Office of Thrift Supervision in 2009. While raising our capital for that launch, the opportunity to acquire Family Federal was brought to our attention and we decided to take the plunge and use that institution as a laboratory to prove that changes in culture, infrastructure and outlook could be achieved at a staid, old-line lender.

Since acquiring Family Federal, we’ve added new products, technologies and completely rehabbed the existing branch network using green technologies. Each of the existing branches has been registered as a LEED project and should achieve LEED EB certification. Additionally, we have worked diligently to augment the culture of the old bank to ensure that green and sustainable features permeate not just our operations, products and services, but also the way our employees think and operate – both here and at home.

While there may be a certain elegance to starting a new green community bank totally from scratch, the knowledge we’ve gained by guiding a very traditional community bank through a cultural change and working to transform the institution makes us an even more meaningful partner to the sustainable business community and our clientele. We are proof that these positive changes can be achieved.

Q: Another interesting aspect was the launch of a green bank in an older, ethnic neighborhood like Cicero. How do you step into a community like Lockport or Cicero and try to pitch “green” as a significant and trustworthy banking alternative?

Levey: For some reason we get asked that a lot but the reality is that green and sustainable business practices make sense in every neighborhood. I’m always surprised when people think that only certain neighborhoods care about “green.” We’ve found a great reception in the areas that we have existing branches and have been warmly welcomed by clients from across the area.

Some of the key tenets of sustainability are completely in sync with those of community banking. GreenChoice Bank operates locally, responsibly and in the community. It’s our sustainable mission that moves us in a direction that will benefit the community even more.

Q: How do you get customers to believe that a green bank is a different or better choice than the traditional, brick and mortar structure just down the block?

Levey: Our customers love that they can partner with a bank that is conscious about more than their money. We’re a local community bank with all the products and services you expect from any financial institution, but we offer advantaged loan and deposit products that reward customers for making more sustainable choices. Our checking account pays a higher rate than other accounts for customers who use our green banking features. We offer recycled checks and we print statements using responsible paper products and soy and vegetable inks. Moreover, we’ve improved operating efficiencies to reduce paper and decrease the environmental impact of our operations.

Our employee policies encourage sustainable choices, such as using public transportation to commute to work and rewarding GreenChoice employees who purchase hybrid or other low emission fuel efficient vehicles. We provide ongoing sustainability training to our employees so that we are always mindful of how we run our bank and can best serve our customers. We’re considering installing a charging station for electric vehicles in each of our parking lots. We also have plans to roll up our sleeves for sustainability in our branches’ neighborhoods by volunteering for community projects that will improve all our lives.

We invest back into the community and leverage customer deposits with loans for sustainable and green projects that are good for everyone. In some cases, we might be able to get a more complicated deal done because we understand sustainability and LEED projects and can more effectively or creatively structure a loan in ways big money-center banks can’t. For example, we recently financed the construction of the first green prefabricated home to get permitted and built within the city of Chicago and provided funding for the first rehabilitation of a traditional Chicago bungalow in Cicero to be registered with the National Association of Home Builders Green program (NAHB).

Q: And finally, what are some of the things you’ve learned in the bank’s short existence that you think other banks, or even storefront businesses, can learn about being green? Is the green concept a long-term, viable business option in a sometimes roller coaster lending world?

Levey: The green concept is not fleeting – it’s necessary, desirable and responsible behavior that is quickly moving from trendy status to a fully integrated part of everyday life. We expect to see pretty strong growth because of the level of customer interest in working with a bank they can feel good about. In addition to more traditional commercial lending, residential mortgage and retail deposit products, we’re actively looking to target the sustainable business community by providing sponsorships and educational resources, as well as lending to local small businesses and entrepreneurs who create green jobs. We want to share what we have learned on our journey to create our more sustainably-run business.

We’re re-examining the banking industry’s long-standing wasteful business practices, applying product innovations and enacting more mindful sourcing. We are often asking questions of our banking industry partners – questions that haven’t been asked before – in order to try and do things better.

Consumers have the power to vote with their wallets. We are empowered by the trust our customers are putting in us and our locally-owned financial institution. We look forward to doing great things through our dedication to innovative sustainability and by offering a better choice in community banking.

Mr. English is a freelance writer based in Chicago.