Independent Banker - April 2022 - 61

ecorah Bank & Trust Co. in Decorah, Iowa, a family- and
employee-owned bank, has deep roots in green lending.
Former president and CEO Larry Grimstad has long been
passionate about renewable energy, and his son, Ben Grimstad,
who now heads the bank, shares his interest in sustainability.
Today, the $600 million-asset community bank is active
in fi nancing energy effi ciency and renewable energy projects
in the communities it serves. And as Decorah Bank & Trust
was looking for growth opportunities, creating a " green " arm
was a strategic next step. It offi cially launched Greenpenny, a
separately branded virtual branch, in June 2020.
" A lot of community banks are working on trying to fi nd
growth strategies that go beyond their own geographies, and
Decorah Bank & Trust is no exception, " says Greenpenny
president Jason MacDuff .
Greenpenny can take deposits nationally, and those deposits
are redeployed to fi nance clean energy and carbon-reducing
projects, including solar, wind and geothermal projects for both
consumers and commercial businesses. The branch operates
with a dedicated staff but can leverage Decorah Bank & Trust's
infrastructure, such as its core operating systems, as well as
risk and compliance resources.
Continued growth in this niche
Industry observers see Greenpenny as part of a wave of
interest in green banking and loan products. " We're seeing
[an explosion] of new green products-everything from
carbon-neutral loans to carbon-neutral cards, " notes Silvia
Mensdorff -Pouilly, senior vice president, banking & payments
Europe, at fi nancial technology company FIS.
Benefi cial State Bank in Oakland, Calif., is another
community bank active in this niche. Between its founding in
2007 and December 2020, it provided $135 million in loans
to the environmental sustainability sector, according to Jae
Easterbrooks, vice president/relationship manager for the
$1.5 billion-asset bank.
The loan total includes $42 million in funds to the
commercial renewable energy sector (including solar, biogas
digester, small and environmentally benign hydro, wind and
geothermal). The community bank also purchased a portfolio
of $29 million of solar panels on residential rooftops.
Benefi cial State Bank provides a variety of environmentally
sustainable products and services to customers, too, says
Easterbrooks. For example, it helps income-qualifi ed
customers in California fi nd aff ordable fi nancing for the
purchase or lease of a new or used hybrid or electric vehicle
through the Clean Vehicle Assistance Program. Its Change
Maker environmental deposit program rewards customers
who have made a business commitment to improve the
sustainability of their environmental footprint. And the
community bank partners with Aspiration to carry Zero, a
climate-neutral credit card.
Beth Mattson-Teig is a writer in Minnesota.
D
Government support
for green lending
The GSEs are one way
community banks can
access green mortgage
products. Fannie Mae's
HomeStyle Energy
mortgage is available
to borrowers who are
purchasing a home or
refinancing an existing
home. And Freddie Mac's
GreenCHOICE Mortgage
provides financing
for energy-eff icient
improvements with
any mortgage product
and property type, with
financing terms up to
30 years. It supports
projects like solar panels
and geothermal heating,
or activities that reduce a
home's carbon footprint.
Greenpenny, the ecofriendly
virtual branch of
Decorah Bank & Trust in
Decorah, Iowa, off ers the
GreenCHOICE Mortgage
as part of its suite of
products. One of the
advantages to borrowers,
says president Jason
MacDuff , is they take
out up to 15% of the " as
completed " value of the
home to make energyeff
icient improvements
and finance those within
their mortgage. Also, from
a borrower's perspective, a
GreenCHOICE Mortgage is
not considered cash out.
MacDuff adds that the
combination of energy
savings a homeowner
will get from these
projects and aff ordable
financing on the mortgage
reduces costs and
makes refinancing more
attractive even in a rising
interest-rate environment.
independentbanker.org Q 59
Photo by Dana Anderson
http://www.independentbanker.org
Independent Banker - April 2022

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