Banks Going Green, Part 2

In an earlier posting, I noted that some Japanese banks had good success with “green” deposit accounts. Recent political events may make these accounts more viable in the United States. In the meanwhile, some credit unions are taking an innovative approach to “green” consumer lending.

The economic basis for the Japanese deposit accounts is a “cap and trade” system, an approach to “cap” the level of pollution and provide an economic incentive for companies who are below the limit to “trade” pollution credits. This establishes a marketplace for pollution credits, similar to the stock market. Interestingly enough, during the presidential campaign both the Senators McCain and Obama stated they were in favor of “cap and trade”, so maybe it will ultimately become a reality in the US.

In the meanwhile, there are other opportunities. Velocity Credit Union partnered with the Austin Energy Home Performance Energy Star program, and used the rebates to offer 0% APR loans for certain energy efficient upgrades. They’ve highlighted this program through web promotion and high impact billboards. We expect retailers to offer 0 or low APR loans, but not banks!

Maybe deposit accounts indexed to pollution credits are a distant future, but there are innovative ways to differentiate your company and capture attention — and market share — by creating promotions tied to consumer concerns about energy costs.