An Oregon community bank has struck upon a unique way to attract deposits: appeal to the socially conscious Oregonians' better nature.
The $144 million-asset Bank of Newport offers its Progressive Banking option to customers who want their deposits to go into socially progressive investments and loans.
In less than a year, $1 million in new money market, CD, and checking accounts have been opened through Progressive Banking.
Dave Hansen, vice president and manager of the Lake Oswego, Ore., office of Bank of Newport, started the product last October.
He said it's the only such bank-deposit product in the Pacific Northwest, and one of the only community banks in the country to offer it.
Vermont National Bank and South Shore Bank in Chicago both pioneered the use of targeted deposits to attract socially conscious customers.
Vermont National's Socially Responsible Banking Fund is targeted mostly to environmentally sound investments.
Since it began in 1989, Vermont National has garnered $49 million in deposits.
"We decided to do it because of input from the community," Mr. Hansen said.
Mr. Hansen said Bank of Newport's program was tailored to the concerns of Oregonians.
The bank offers depositors choices ranging from small-business loans and low-income housing to community development bonds, as well as general short-term investments.
Wherever the money goes, its destination meets social criteria set by the board of directors with the help of a firm that specializes in socially conscious investing.
Mr. Hansen said that the investments have ranged from buying bonds issued by American Indian tribes for community development to financing the rehabilitation of low-income single-family homes through a nonprofit developer in Portland.
A local advisory board also counsels the bank on what types of investments it should make with depositors money.
The Progressive Banking product doesn't offer a lower rate than the bank's traditional deposit products, either.
"We don't want them to have to sacrifice their financial goals for their social concerns," Mr. Hansen said.
"They get the same return as any other depositor."