Why I Co-Founded a Community Bank 20 Years Ago

A different kind of bank is possible, and in 2007, my wife Kat and I set out to design one.

Banks have a bad rap. And for good reason.

For decades, big banks have contributed to the staggering concentration of wealth and power we see in America today. Most continue to invest in, and lend to, harmful industries like fossil fuels and guns. And many are complicit in the long-standing exclusion of vulnerable communities, even decades after the end of official redlining.

Access to capital—whether through a bank, your family, or other community resources—is critical for upward mobility. It’s how we build wealth. That’s especially true of home ownership, which has historically been the single most important way for people to build intergenerational wealth. Yet for decades, Black and Brown families were systematically denied loans, limiting the home ownership and wealth accumulation that others could take for granted.

That’s why, in 2007, my wife Kat and I set out to design a different kind of bank, one that lends its capital ethically, guided by the needs of the planet and the communities it serves. We founded Beneficial State Bank on the principle that today’s banks can help address the disparities caused by redlining and persistent underinvestment in communities of color.

Headquartered in Oakland, California, Beneficial State Bank operates on a triple bottom line, equally prioritizing people, the planet, and long-term financial sustainability. And because the bank’s majority owner is the Beneficial State Foundation, a nonprofit organization, it is permanently governed in the public interest.

Our lending portfolios are intentionally designed to address historical wrongs. The vast majority of the Bank’s capital is invested in low-to-moderate income communities that have historically been excluded from the American financial system. We also avoid lending that is likely to have a negative environmental or social impact. 75 percent of our loans must be proactively beneficial. Zero percent of them can be harmful.

Here are a few examples of how we put this model into practice.

As of the end of 2024, we held more than $170 million in outstanding loans and commitments to environmental initiatives—things like renewable energy, green buildings, environmental advocacy, and natural resource protection.

One of our flagship projects that year was helping public agencies implement lower energy solar solutions. These entities often face a double bind: unpredictable utility prices make it difficult to plan for the long term; but high upfront costs put energy-efficient infrastructure out of reach.

Beneficial State Bank provided a total combined $1 million loan to support two projects, one in the Sacramento Valley and another in the southern San Joaquin Valley. With the Bank’s support and a partnership with White Pine Renewables, these communities were able to accelerate the deployment of solar power where it was needed most.

Since 2007, our environmental portfolio as a whole has helped avoid nearly 26,000 metric tons of CO₂ equivalent.

On the housing side, Beneficial State Bank has spent nearly two decades serving communities abandoned by Wall Street and dismantling the legacy of redlining and disinvestment. To date, we have financed over 17,000 affordable housing units.

Among the projects we’ve financed are the Normandie Apartments in Los Angeles, which provide more than 50 supportive housing units to formerly unhoused people. Through a partnership with the Coalition for Responsible Community Development, residents receive wraparound services like health screening and crisis management.

These are just two examples of how Beneficial State Bank’s values-based model is delivering results. We’ve also supported financial literacy programs for formerly-incarcerated populations, helped working families afford their first car, and secured financing for small businesses that have been turned away by the big banks. In 2024, we issued $18 million in loans to small businesses. Our goal isn’t just to help people in the short-term, but to drive economic mobility over the longer term.

This model represents a wholesale rewiring of the relationship between banks and the communities they serve. Equity and sustainability are part of our operational north star. They help determine how we allocate capital, which projects we finance, and which investments we make. We now have branches in California, Oregon, and Washington.

Twenty years ago, Kat and I set out to build a bank that was self-sustaining and ethical, doing its part to correct the historical wrongs that denied so many working families the chance to build a better life. Twenty years later, that’s still our vision.