s revealed by the financial crisis of 2008, incentives are dangerously misaligned in the banking industry. Banks and the bankers who run, them too often pursue shortterm profitability to benefit wealthy citizens and large corporations at the expense of society overall and the long-term financial stability of the economy. But it doesn’t have to be this way, and One PacificCoast Bank (OPCB) is pioneering a new paradigm that proves it. OPCB calls its model “beneficial banking,” with a vision of “a banking industry that is fair to the person with the least bargaining power and provides access to financial services for all our communities.” OPCB achieves this by flipping the banking business model on its head: All of the bank’s economic shares are owned by the not-for-profit One PacificCoast Foundation. The Foundation is mandated to invest all profits back into local communities and the environment. This innovative approach frees OPCB from traditional incentives for short-term profitability and risk aversion, and allows for a better aligned business strategy with the long-term values and needs of its employees, customers and community. OPCB offers capital for industry sectors that might have trouble getting loans from traditional banks, such as renewable energy, green building and low-income housing. Its demonstrated success with this model has the potential to transform the traditional banking marketplace.
“JUST has the potential to transform the way the banking industry makes lending and investment decisions by highlighting key aspects of business that often are overlooked by the market.” –Kat Taylor, CEO of OPCB As a financial institution, OPCB is accustomed to having its financial fitness scrutinized by banking regulators. It excels on those evaluations, and participating in the JUST program promotes the holistic view of the organization. While OPCB did not set out to meet any specific criteria when creating its business practices and policies, its leaders were happy to have JUST validate their effort to meet and greatly exceed industry best practices in almost every category. Looking at the organization through the JUST lens also highlighted some areas for improvement. This selfreflection led the bank to reevaluate its practices and policies, and it also influenced the evolution of the JUST metrics themselves, helping the Institute refine this new program.
Diversity OPCB has recently taken the next step to promote an As a company overall, OPCB has a very diverse workeven greater level of corporate responsibility and trans- force. Employees with various ethnic backgrounds exparency by becoming a pilot company in JUST, the new ceed the U.S. average (29% versus 28%). As a commusocial justice label for businesses and organizations. A nity bank, OPCB also tries to ensure that its employees program of the International Living Future Institute reflect the areas in which they reside. The bank’s (the Institute), JUST is a standardized metric against California and Oregon locations aligned with the dewhich organizations can evaluate their business prac- mographics in their state, but the Ilwaco, Washington tices, and offers a transparent platform to publicly dis- location did not have any non-white employees, resulting in a 1-star score for Ethnic Diversity. This suggests close their scores. an area for improvement for OPCB; however, the Ilwaco branch’s rural location in a majority Caucasian