A Commitment to Sustainability and Social Justice Fuels This Bank’s Customer Service

In a Nutshell: Beneficial State Bank offers competitive banking products and services. But the company also invests resources to create positive social and environmental impact. The bank’s financial education efforts include a program that helps formerly incarcerated individuals establish healthy financial practices. Beneficial State Bank’s commitment to social justice and the environment has earned it our Editor’s Choice™ Award.

Many entrepreneurs start businesses to fulfill their lifelong dreams of being their own boss and sharing their products or services with the world. For a new company to succeed, it must establish business practices that allow it to earn revenue that exceeds its expenses.

But entrepreneurs may use other indicators to measure their success. Some business owners position their companies to meet non-monetary goals alongside those related to earning more profits and gaining greater market share.

Beneficial State Bank is a financial institution driven by its commitment to environmental sustainability and creating a positive social impact. We spoke with Monique Johnson, the bank’s Senior Vice President and Director of Client and Community Partnerships, to learn more about the company’s mission, products, and services.

Beneficial State Bank was formed in 2007 and has approximately $1.7 billion in assets. The bank operates seven branches in California, Oregon, and Washington.

Beneficial State Bank’s five loan production offices supplement its branch network. Johnson said the loan production offices focus on the climate and other environmental concerns.

The bank’s Co-Founders, Kat Taylor and Tom Steyer, value planet sustainability and social justice. The duo started Beneficial State Bank to promote those values in the financial arena.

As the bank organically increased in size over the years, it also grew by acquiring multiple banks. Beneficial State Bank most recently acquired a bank in 2016. Johnson said the bank has a unique ownership structure because it is majority-owned by the nonprofit Beneficial State Foundation, which advocates for a more equitable banking system.

Beneficial State Bank is a state-chartered commercial bank and a Community Development Financial Institution (CDFI). The bank is also a B corporation, which means it meets high standards of social and environmental performance, public transparency, and accountability.

“We’re not only a B corporation, but we’re one of the highest-rated B corporations in the world,” Johnson said. “That gives us our triple bottom line strategy — for prosperity, the planet, and people. Our internal goal is to not only provide 60% of all of our lending to communities or individuals with low to moderate incomes, but 75% of all the lending we do is in one of our mission categories.”

Beneficial State Bank avoids lending to or having relationships with businesses involved in practices that can harm people or the environment, including fracking, managing private prisons, and manufacturing any form of weaponry.

Beneficial State Bank’s mission guides it to support affordable housing, auto loans, health and well-being initiatives, and arts and cultural activities. It also helps the bank build communities, fund educational endeavors, and promote youth development and environmental sustainability. 

Many consumers today are mindful of a business’s practices and ethics regarding the environment and social justice issues. Johnson said numerous banks claim to value sustainability, but a closer look at their annual reports may reveal otherwise. She advises consumers to research companies before entering into business relationships with them to ensure an organization’s values align with their own.

“The new urban professional wants to work with vendors and partners who share their values,” Johnson said. “And nonprofit organizations that bank with us want their money working for causes they value and supporting stakeholders they work with. We see that a lot right now, even with the younger generations.”

Beneficial State Bank works with business and consumer clients across the country. The bank serves other B Corps and nonprofit organizations focused on social justice and issues that impact the environment.

The bank has enjoyed a growing number of auto loan customers in recent years. Johnson said a client who refinances their auto loan with Beneficial State Bank may be able to save up to 9% on their rate.

Beneficial State Bank seeks to provide lending opportunities to immigrants. In 2022, the bank lent nearly $25 million in auto loans to more than 700 borrowers who had an Individual Taxpayer Identification Number but were waiting to receive a Social Security number.

“We’re really able to go outside of the three primary states we do business in if we can align with client needs in other areas,” Johnson said. “And we’re beginning to get noticed by a number of fiscal sponsors and those that are trying to give their support to other nonprofits. From a regional perspective, our goal is to really be the largest CDFI on the West Coast which we already are, but we’re getting a lot of national attention as well.”

Beneficial State Bank offers products and services that align with the bank’s status as a B Corp and a CDFI. The bank issues a secured credit card, the Beneficial Builder card, to help clients who need to improve or establish their credit.

Beneficial State Bank doesn’t simply offer products and services that can help its clients improve their financial health — the bank also provides financial education. The company helps its clients learn about credit scores and what actions they can take to improve their scores.

Beneficial State Bank also educates clients on the importance of contributing toward a savings account they can use to grow funds for a large purchase, such as buying a new home or car. 

The bank dedicates a page on its website to financial wellness and provides financial wellness programs at no charge to its clients. 

Beneficial State Bank offers its clients access to a virtual financial coach that conducts coaching sessions to provide personalized financial advice and action plans clients can use to achieve their financial goals.

“Our financial coach is really an AI type of self-serve path that can help clients through about 1,200 different scenarios to guide them to improve their credit scores, pay down their debt, and build healthy financial habits,” Johnson said. “It’s available 24/7, so you can work at your own pace. You can use our coach to get some personalized guidance and actionable steps to help you correct some things you may have done in the past and improve your financial lifestyle.” 

Beneficial State Bank employs a full-time financial education manager who hosts financial wellness workshops both online and in person. The bank’s financial education manager also meets with clients to provide financial counseling and helps them discover solutions that address their unique circumstances.

Beneficial State Bank isn’t actively seeking to add more locations to its branch network, but that doesn’t mean the company’s growth is stagnating. Johnson said the bank’s commitment to being a community leader and connector, coupled with its robust outreach programs, attracts attention from like-minded organizations and individuals across the country.

Beneficial State Bank partners with the CROP organization, a nonprofit that supports formerly incarcerated individuals as they reenter society. Johnson said CROP’s program features a 12-month intensive training initiative that equips participants with skills that can help them establish careers with a focus on technology.

Beneficial State Bank partners with CROP to provide 10 weeks of financial wellness classes to individuals participating in CROP’s program. The bank also offers participants a comprehensive package of banking products and services that includes a personal checking account, the bank’s secured credit card, and accompanying wellness sessions.

“It’s our goal to equip those participants with the knowledge and tools that they need to build a stable and successful future,” Johnson said. “When participants graduate, we’ll promote them from our impact perspective and write client stories about them. When the word got out about what we’re doing to help CROP and their cohorts, we saw a number of referrals coming from other community partners that would love our assistance in the same way.”

Beneficial State Bank founded its Earth Services team in 2019 to provide financing solutions that meet client needs and promote environmental sustainability. Johnson said the team has issued more than $100 million in loans to organizations committed to critical environmental concerns, such as mitigating the impact of climate change.

The bank seeks to advise other businesses to establish goals centered around supporting the environment and clean energy projects such as solar power.

Beneficial State Bank’s commitment to racial justice informs the bank’s lending practices. Johnson said the bank is one of 20 diverse lenders in the U.S. piloting a program called Underwriting for Racial Justice to examine underwriting practices in the financial sector and increase access to capital to people of color.

Beneficial State Bank dedicates consumer resources to increase opportunities for affordable housing. Johnson said the bank’s status as a CDFI positions affordable housing as a significant area of focus for the bank, which is why it recently expanded the team that works to promote affordable housing opportunities.

As she looks toward the future, Johnson envisions Beneficial State Bank continuing its mission while seeking to enhance its products and services.

“As for the future, we’re going to be looking to have more transparent goals from our mission framework,” Johnson said. “We’ve brought on a chief impact officer, and we’re also going through a strategy right now to expand our small business programming. For every small business that comes our way, we want to make sure we can say yes to something, whether it’s with us or through another channel that can get them the right financing or services they need.”