Regan Brown
San Diego County Credit Union (SDCCU) is a credit union based in San Diego that offers online investing services tailored to its members' needs. In March 2022, the San Diego Board of Supervisors voted to ban county investment in all fossil fuels, including coal, petroleum, and natural gas. This decision was made to align the county's investment goals with its climate goals and values. While SDCCU has not publicly disclosed its investment strategy, credit unions generally do not invest deposits directly into fossil fuels. As part of their charter, credit unions are restricted from investing in the stock market and can only invest in public instruments like federal bonds. Individuals concerned about the environmental impact of their financial institutions can utilize resources such as Mighty Deposits and Fossil Free California's Move Your Money page to identify banks and credit unions that align with their values and do not fund fossil fuel industries.
| Characteristics | Values |
|---|---|
| Does San Diego County invest in fossil fuels? | No, the Board of Supervisors voted to ban county investment in all fossil fuels in March 2022. |
| Are there other credit unions that invest in fossil fuels? | Yes, credit unions like Elan Financial Services, which provides services to many credit unions and small banks across North America, are still invested in fossil fuels. |
| How to find out if a credit union invests in fossil fuels? | Review the annual reports from the credit union. If they are not transparent about their investment strategy, they are likely invested in fossil fuels. |
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What You'll Learn
San Diego County's stance on fossil fuels
While San Diego County has taken a firm position against investing in fossil fuels, it is worth noting that financial institutions, including credit unions, have varying relationships with the industry. Credit unions, by definition, do not invest directly in fossil fuels. As part of their charter, they cannot invest in the stock market, where most fossil fuel investments are made. Instead, credit unions are limited to investing in public instruments like federal bonds. However, individual lending decisions can vary among credit unions, and some have been criticized for their indirect connections to fossil fuel industries.
For example, Elan Financial Services, which provides credit card services to many credit unions and small banks, is considered problematic due to its involvement in fossil fuel financing. In contrast, some credit unions have actively promoted their commitment to environmental sustainability and their decision not to invest in fossil fuels.
When considering where to place their money, individuals concerned about fossil fuel investments can utilize resources like Mighty Deposits, Bank For Good, and Fossil Free California's Move Your Money page. These platforms allow users to filter and find financial institutions that align with their values, including those that do not fund fossil fuel industries.
Overall, San Diego County's stance on fossil fuels is reflected in its decision to ban county investments in the industry. While credit unions generally do not invest directly in fossil fuels, individuals should carefully research and consider the specific practices and investments of their chosen financial institution to ensure alignment with their values.
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Credit unions and fossil fuel divestment
Credit unions are not-for-profit institutions that prioritise their members over shareholders or profits. They do not invest in the stock market or directly in fossil fuels. However, they can invest in public instruments like federal bonds, and individual lending decisions may still support fossil fuel industries.
In San Diego, the Board of Supervisors voted to ban county investment in all fossil fuels, including coal, petroleum, and natural gas. This decision aligns with the region's climate goals and ensures that public funds are not used to support industries that contribute to climate change.
While credit unions may be a better alternative to traditional banks for those seeking to avoid supporting fossil fuel industries, it is important to note that not all credit unions are the same. Some credit unions may offer credit cards through partnerships with fossil fuel-invested institutions. Additionally, individual credit unions may choose to lend to businesses tied to the fossil fuel industry.
To make an informed decision, it is recommended to review a credit union's annual reports and utilise resources like Mighty Deposits, Bank For Good, and Fossil Free California's Move Your Money page to identify financial institutions that align with your values.
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Credit unions' investment limitations
Credit unions are subject to various investment limitations that govern their operations and financial activities. These limitations are imposed by regulatory bodies and laws to ensure the safe and prudent management of members' funds. Here are some key aspects of credit unions' investment limitations:
Permissible Investments: Federal Credit Unions (FCUs) have specific guidelines on permissible investments outlined by the National Credit Union Administration (NCUA). For instance, FCUs can invest in obligations guaranteed by Farmer Mac, as per the Agricultural Credit Act. They can also invest in certain mutual funds and collateralized mortgage obligations. Municipal securities are another permissible investment, but FCUs must conduct a thorough analysis and adhere to concentration limits.
Investment Repurchase Transactions: Credit unions can engage in investment repurchase transactions, particularly involving first-lien mortgage notes. These transactions are subject to limitations and safety considerations, as outlined in Section 703.13(c) of the Electronic Code of Federal Regulations. Credit unions must obtain daily assessments, maintain adequate margins, and comply with concentration limits to manage risk.
Limitations on Stock Market and Fossil Fuels: Notably, credit unions are prohibited from investing in the stock market as per their charter. Instead, they can only invest in public instruments like federal bonds. This inherently limits their direct investment in fossil fuel industries, as they do not engage in stock market investments.
Focus on Members and Community: Credit unions are not-for-profit entities, which means they prioritize their members' interests over profits or shareholder value. This inherent structure often aligns with sustainability and community-focused values, making credit unions attractive alternatives to traditional banks for individuals concerned about climate change and the impact of their financial choices.
While there is no explicit mention of San Diego County Credit Union's investment policies regarding fossil fuels, credit unions generally do not invest deposits directly into fossil fuels due to their limited investment scope. However, it is worth noting that individual lending decisions can vary, and credit unions may still lend to businesses tied to the fossil fuel industry.
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County investment in fossil fuels
Credit unions are not-for-profit institutions that prioritise their members over shareholders or profits. They do not invest in the stock market or directly in fossil fuels. However, each credit union makes independent lending decisions, and some have been criticised for their involvement in fossil fuel projects.
In March 2022, San Diego County's Board of Supervisors voted to ban county investment in all fossil fuels, including coal, petroleum, and natural gas. The 4-0 vote was part of an effort to combat climate change and ensure that the county's investments align with its values. According to Supervisor Terra Lawson-Remer, the decision would prohibit investments in any corporation involved in the exploration, production, drilling, or refining of fossil fuels. The vote brought the county's $13 billion investment pool in line with the region's climate goals.
While San Diego County has taken a proactive approach to divesting from fossil fuels, it's important to note that not all credit unions actively avoid investing in the fossil fuel industry. Some credit unions have been criticised for their involvement in fossil fuel projects, and it can be challenging to obtain information about their investment strategies.
Individuals concerned about the environmental impact of their financial institutions can utilise resources like Mighty Deposits, Bank For Good, and Fossil Free California's Move Your Money page to identify banks and credit unions that align with their values. Additionally, grassroots coalitions like Stop the Money Pipeline provide step-by-step instructions on changing banks to more sustainable alternatives.
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Credit unions vs. banks
While both banks and credit unions offer a wide range of services, from checking and savings accounts to financial literacy programs, there are some key differences between the two types of financial institutions.
Firstly, credit unions are not-for-profit, whereas banks are for-profit enterprises. Credit unions exist to serve a community of people tied by a "bond of association", which may be based on location, employer, faith, or membership in another organization. They are owned and operated by their members, ensuring that the institution operates with its members' best interests in mind, rather than seeking to maximize profits for external shareholders. Banks, on the other hand, are owned by shareholders and function to generate profits for them and investors. Their primary revenue comes from the interest they earn on loans, and their operations, product pricing, and services are geared toward making money.
Another difference is that credit unions, by their charter, cannot invest in the stock market, whereas banks can and do. Credit unions do not invest deposits directly into fossil fuels because they do not make these types of investments. They are only allowed to invest in public instruments like federal bonds. Banks, however, have been criticized for investing in fossil fuel industries, and consumers are increasingly choosing to put their money into institutions that do not fund these sectors as a way to fight climate change.
In terms of interest rates, credit unions tend to offer higher rates on deposits, while banks may offer higher interest rates on loans and credit cards. Banks often have a more extensive fee structure, including account maintenance fees, overdraft charges, ATM usage fees, and specialized service fees. Credit unions, being not-for-profit, generally have lower fees, which can provide financial relief for members over time.
Finally, banks often adopt new technology and tools more quickly than credit unions, which tend to have fewer branches and ATMs and less advanced digital channels. If having access to the latest online banking systems and a wide network of ATMs is important to you, then a bank may be the better choice. However, credit unions offer a more personalized, community-oriented experience, with a focus on serving their members through extensive digital banking solutions, widespread ATM and branch access, and financial counseling.
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Frequently asked questions
No, San Diego County does not invest in fossil fuels. In 2022, the Board of Supervisors voted 4-0 to ban county investment in all fossil fuels, including coal, petroleum, and natural gas.
You can review the annual reports from your credit union. If they are not transparent about their investment strategy, they are likely invested in fossil fuels.
You can use resources such as Mighty Deposits, Bank For Good, BankTrack, and Stop the Money Pipeline to find a financial institution that aligns with your values.
Credit unions are not-for-profit and prioritize their members. By switching to a credit union, you can fight climate change and ensure that your money is not funding industries that contribute to the climate crisis.
