Wednesday, May 22, 2024

Chess players set up in June by Cambridge Trust in Harvard Square. (Photo: Marc Levy)

More and more people think of themselves as conscious consumers. A recent study found that a third of global consumers are willing to pay more for sustainable goods and services. Naturally, many of us think of our spending power as confined to, well, spending. But where we deposit and save our dollars can matter just as much as how we spend them.

When we give a bank our dollars, we entrust them with the authority to decide who among us can borrow money, which businesses get investments and whether our dollars stay within or leave the region. In short, these decisions affect our communities for better or for worse. Choosing to bank locally ensures that our dollars are invested back into our communities.

Last year, 59 percent of Massachusetts deposits – $340 billion – were concentrated among just three banks: Bank of America, Citizens Bank and State Street Bank. This is problematic for three key reasons:

  • These big banks rarely reinvest the money back into communities from which the money came
  • They regularly use biased lending practices and cater disproportionately to big business, rather than small or medium sized businesses
  • They often invest in industries or companies you as a consumer may take an issue with (for instance, Bank of America is a top funder of fossil fuels)

April was #MoveYourMoney month, a national campaign advancing understanding across the United States of the significant role community banks play in the banking system and the national economy. It aims to challenge the inertia that for decades has led consumers to entrust too much of their money to a handful of big banks that hold disproportionate power over our communities without giving back to them. Large banks are structurally incapable of lending to small businesses because they do not specialize in local markets and consider lending too risky. Banks such as Bank of America, Chase, Citibank and Wells Fargo mainly provide $250,000-plus loans to businesses with more than $5 million in annual revenues. These lending practices leave out most small businesses such as clothing stores, architects and law firms, and restaurants.

At the individual level, where we choose to save our hard-earned dollars may seem trivial. But when you aggregate those dollars at a collective level, these choices hold significant weight and leverage. The practices of conscious consumers, fair trade and countless other movements and spending trends show we are individually and collectively value economic practices free from inequity, discrimination and exploitation. Being thoughtful about how we save is a significant step forward in ensuring that the traces of our economic choices are increasingly aligned with what we truly value.

You can learn more about local banks and credit unions in Cambridge at For information on how to start moving your money, see this Move Your Account checklist.

Tala Katarina Ram-Rainsford is a master of public policy candidate at the Harvard Kennedy School and an intern with Cambridge Local First.