As banks nationwide struggle with the financial crisis, Oregon-based Umpqua Bank has created a new eco-banking division to promote energy conservation and renewable-energy projects.
Last year, the Energy Trust of Oregon, an independent nonprofit, provided almost $41 million in cash incentives and technical assistance to Oregon businesses and households for 60,000-plus energy-efficiency and renewable-energy projects.
But that money often doesn't fully cover a property owner's costs for projects such as replacing single-pane windows or setting up alternative energy systems.
Umpqua—which is WW's bank—announced recently it is hoping to fill whatever financial deficits remain for homeowners with renewable-centric, low-interest loans of as much as $50,000, or $100,000 for small-business owners.
Umpqua initially aims to generate $20 million in business through its eco-banking division—or about 1 percent of the $2 billion it loaned last year.
Skeptics question just how much ground Umpqua will break.
Eric Benjamin installs wind systems for Inland Electric, an electrical contractor that installs alternative energy units. Benjamin got a stack of brochures about Umpqua's loan program and handed out 50 of them to clients. No one bit.
"People were able to get better loans through other organizations or credit unions," he says. "Umpqua's loans were too high of an interest rate."
Umpqua says its eco-banking rate (at 7 percent as of April 27) doesn't include start-up or closing fees.
And Seth Walker, director of marketing and communication at environmental nonprofit Ecotrust, thinks Umpqua is correctly gauging the winds of financial change.
"One of the few places capital is still flowing is in green endeavors," Walker says, pointing to efforts nationally by President Obama and at the state level by Gov. Ted Kulongoski to kick-start green investment.
Umpqua is not the first financial institution to go eco-friendly. ShoreBank Pacific has been in the eco-banking business since 1997, having provided loans for everything from alternative energy to specialty local agriculture. Over the past 12 years, ShoreBank has used a "triple bottom line" business model that places equal value on environmentally sustainable practices, community development and creating profit.
That's not just marketing rhetoric, says ShoreBank Pacific President Mark Coffey. He says ShoreBank customers like that their bank invests money in sustainable and community endeavors and also operates on a local scale.
Nik Blosser, president of Celilo Group Media—publisher of the annual Chinook Book, which includes 300-plus coupons for local, environment-friendly businesses—has been a client of ShoreBank Pacific, using its loans to cover upfront publishing costs.
"A bank is one of the most important relationships a small business can have," says Blosser. "Their mission was in line with our mission."
Dan Weldon, who is leading Umpqua's eco-banking division, says he's always looked at ShoreBank "as a great example of how business can be done."
Weldon, 45, has worked at Umpqua for the past four years as a commercial lender and has been in banking since 1989. He is assembling a team that represents all sectors of the banking industry from mortgage, commercial lending and community banking to private client services. Weldon is also one of the few Leadership in Energy and Environmental Design-accredited loan specialists in the country.
Umpqua has already served some eco-banking clients.
George Hansen of Foothills Honey Co. in Colton received a $120,000 loan from Umpqua Bank along with state and federal tax incentives to help him install solar panels for his business and home.
"My regular lender for farm purposes isn't doing these kind of things," he says, but with Umpqua, "if you are willing to go through the process, I don't think the incentives can get any better."
Umpqua has 150 branches in Oregon, Washington and California, including 72 in Oregon and 20 in Portland.