Beneficial State Foundation owns and supports Beneficial State Bank, an ideologically motivated financial institution formed by environmentalist billionaire and former Democratic presidential candidate Tom Steyer and his wife Katherine Taylor. Beneficial State Bank makes loans to low-income borrowers in the Pacific Northwest of the United States, although its loan practices have been criticized by left-of-center activists as “predatory.” ^{1 2}

The Foundation, which operates in Northern California, Oregon, and Washington, advocates for environmentalism and left-of-center banking policies.

Organizational Overview

Beneficial State Foundation owns and assists Beneficial State Bank in its loan programs for low- to middle-income individuals, although only 26% of Beneficial State Bank’s lending products are designed for low- to middle-income borrowers. Beneficial State Foundation owns Beneficial State Bank (formerly One PacificCoast Bank), which acquired Albina Community Bank (formerly American State Bank) and merged it into Beneficial State Bank in 2017. ^{3 4 5} Beneficial State Foundation receives all of Beneficial State Bank’s profits, which it then invests in left-of-center energy and banking initiatives and distributes to community development organizations across the Pacific Northwest. ^{6 7}

Beneficial State Foundation also contributes funding to build similar banks across the country. In addition to promoting more nonprofit banking, Beneficial State Foundation frequently condemns for-profit banks, arguing against investments in conventional energy companies and claiming that banks should commit to reducing the carbon emissions of their investments. ⁸

Policy Advocacy

Beneficial State Foundation redirects all Beneficial State Bank’s profits into left-of-center advocacy and community development programs, focusing on promoting left-of-center banking regulation and environmentalist policy.

Banking Regulation

Beneficial State Foundation has invested substantially in promoting left-of-center bank regulation, supporting increased government intervention on both the state and federal level. Beneficial State Foundation supports aggressive intervention by the federal Consumer Financial Protection Bureau (CFPB) and has advocated for states to implement their own consumer oversight agencies, especially in California. ⁹

Beneficial State Foundation also claims to oppose supposedly “racist” practices which the Foundation alleges are commonplace in traditional banking. Beneficial State Foundation has been active in supporting the left-of-center Community Reinvestment Act (CRA), arguing that any reform to the act should explicitly include criteria for “racial and environmental equity.” ¹⁰ Aside from supporting the CRA, Beneficial State Foundation argues for the creation of a fully-funded community development program with a minimum of $300 million in public funding given to invest in low-income communities. ¹¹

Most radically, Beneficial State Foundation endorses the creation of public banks with left-of-center social and environmental objectives in mind, beginning with the creation of a statewide public bank in California. ¹²

Environmentalism

Beneficial State Foundation is most active in pushing environmentalist policy in the state of California, working with both nonprofit organizations and the state government. The Foundation works with the California government to regulate state energy usage, including regulating access to energy sources, policy on utilities, and the sale of energy to consumers. ¹³

Beneficial State Foundation announced a ”Climate Challenge” at the Global Climate Action Summit in 2018. As part of the challenge, participants are encouraged to purchase products from a database of brands that meet environmentalist certifications. Through the program, Beneficial State Foundation then feeds participant purchase data back to the California government to support legislation to reduce greenhouse gas emissions. Program participants are also enrolled in a database that tracks the purchasing decisions each participant makes through the day, rewarding decisions that the Foundation defines as “environmentally conscious” and reporting that data back to the state. Several California localities and the University of California system joined the program in 2018. ¹⁴

In June of 2018, Beneficial State Foundation announced the Clean Vehicle Assistance Program in partnership with the California Air Resources Board to give Californians up to $5,000 in grants funded by California Climate Investments to buy electric vehicles. Though the grants do not have to be repaid, the program also encourages participants to apply for auto loans from Beneficial State Bank. The Clean Vehicle Assistance Program is designed to provide grants to individuals with little to no credit history. Beneficial State Foundation has a history of initiatives to provide credit and loan services to individuals with poor credit, supporting Beneficial State Bank’s partnership with LendUp to market a credit card for individuals with low credit scores. ¹⁵

Predatory Lending Controversy

Beneficial State Foundation, and Beneficial State Bank, have been accused of predatory lending practices in the past, primarily through a 2017 consumer loan program which marketed its services towards sub-prime borrowers. Critics alleged that the program intentionally targeted illegal immigrants, ethnic minorities, and low-income borrowers who had very few legal resources to combat predatory lending. The National Diversity Coalition reported the bank and Foundation’s questionable lending practices to the Federal Deposit Insurance Corporation (FDIC), the Department of the Treasury, and California regulatory officials. Beneficial State Foundation said the criticisms included “inaccuracies, misstatements, falsehoods, specious arguments, and faulty conclusions,” although Beneficial State Foundation officials did not address or refute any of the allegations specifically. ^{16 17 18}

In 2016, the Beneficial State Bank acquired a bank with an existing auto loan program. ¹⁹ The loan program had distributed over 22,000 auto loans, and after acquiring the bank, Beneficial State Foundation filed and won approximately 1,800 lawsuits against primarily low-income borrowers who had defaulted on their loans. The program was widely criticized for its high interest rates. ^{20 21 22}

1. “Beneficial State Foundation Sponsorships.” Instrumentl. 2020. Accessed June 11, 2020. https://www.instrumentl.com/grants/beneficial-state-foundation-sponsorships
2. Bautista, Faith, Sung, Jim and Bell, Everett. “Letter to Beneficial State Bank” National Diversity Coalition. October 15, 2019. Accessed June 11, 2020.   https://docs.wixstatic.com/ugd/d8141e_89245b3155b146b48fc1e4627b3959cf.pdf
3. Mitchell, Gerald. “Is Your Bank Funding Big Oil? Here’s How To Find One That Isn’t.” Yes! Magazine. December 1, 2016. Accessed June 11, 2020. https://www.yesmagazine.org/democracy/2016/12/01/is-your-bank-funding-dapl-heres-how-to-find-one-that-isnt/
4. “Beneficial State Bank to Merge with Albina Community Bank.” GlobeNewswire. October 2, 2017. Accessed June 11, 2020. https://www.globenewswire.com/news-release/2017/10/02/1138958/0/en/Beneficial-State-Bank-to-Merge-with-Albina-Community-Bank.html
5. Bautista, Faith, Sung, Jim and Bell, Everett. “Letter to Beneficial State Bank” National Diversity Coalition. October 15, 2019. Accessed June 11, 2020.   https://docs.wixstatic.com/ugd/d8141e_89245b3155b146b48fc1e4627b3959cf.pdf
6. “What We Do.” Beneficial State Foundation, May 27, 2020. https://beneficialstate.org/what-we-do/.
7. Thorpe, Devin. “Renamed Bank Still Focused On Building Community.” Forbes. Forbes Magazine, August 28, 2014. https://www.forbes.com/sites/devinthorpe/2014/08/25/renamed-bank-still-focused-on-building-community/.
8. “Industry Relations.” Beneficial State Foundation, May 12, 2020. https://beneficialstate.org/what-we-do/industry-relations/.
9. “Policy Advocacy.” Beneficial State Foundation, September 10, 2019. https://beneficialstate.org/what-we-do/policy-advocacy/.
10. “Policy Advocacy.” Beneficial State Foundation, September 10, 2019. https://beneficialstate.org/what-we-do/policy-advocacy/.
11. “Policy Advocacy.” Beneficial State Foundation, September 10, 2019. https://beneficialstate.org/what-we-do/policy-advocacy/.
12. “Policy Advocacy.” Beneficial State Foundation, September 10, 2019. https://beneficialstate.org/what-we-do/policy-advocacy/.
13. “Beneficial State Foundation Announces Climate Challenge at the Global Climate Action Summit.” Business Insider. September 17, 2018. Accessed June 11, 2020. https://markets.businessinsider.com/news/stocks/beneficial-state-foundation-announces-climate-challenge-at-the-global-climate-action-summit-1027539427
14. “Beneficial State Foundation Announces Climate Challenge at the Global Climate Action Summit.” Business Insider. September 17, 2018. Accessed June 11, 2020. https://markets.businessinsider.com/news/stocks/beneficial-state-foundation-announces-climate-challenge-at-the-global-climate-action-summit-1027539427
15. https://cleanvehiclegrants.org
16. “National Diversity Coalition Calls on Tom and Kat Steyer to Cease Predatory Lending. Business Wire. October 15, 2019. Accessed June 11, 2020. https://www.businesswire.com/news/home/20191015006065/en/National-Diversity-Coalition-Calls-Tom-Kat-Steyer
17. Bautista, Faith, Sung, Jim and Bell, Everett. “Letter to Beneficial State Bank” National Diversity Coalition. October 15, 2019. Accessed June 11, 2020.   https://docs.wixstatic.com/ugd/d8141e_89245b3155b146b48fc1e4627b3959cf.pdf
18. “Beneficial State Bank CEO Responds to Disinformation Attack by Trump Appointee Faith Bautista.” Yahoo Finance. October 18, 2019. Accessed June 11, 2020. https://finance.yahoo.com/news/beneficial-state-bank-ceo-responds-002811677.html
19. “Beneficial State Bank Announces the Completion of Its Merger With Pan American Bank.” PRWeb. June 20, 2016. Accessed June 11, 2020.  https://www.prweb.com/releases/2016/06/prweb13497701.htm
20. Brey, Jared. “California Wants Everyone to Be Able to Afford Clean Energy Cars. Next City. September 13, 2018. Accessed June 11, 2020. https://nextcity.org/daily/entry/california-wants-everyone-to-be-able-to-afford-clean-energy-cars
21. “LendUp And Beneficial State Bank Announce Major Expansion Of Credit Card Partnership.” PR Newswire. Ay 16, 2017. Accessed June 11, 2020. https://www.prnewswire.com/news-releases/lendup-and-beneficial-state-bank-announce-major-expansion-of-credit-card-partnership-300458593.html
22. Tolan, Casey. “Bank founded by Tom Steyer as long record of lawsuits against low-income borrowers.” The Mercury News. January 26, 2020. Accessed June 11, 2020.  https://www.mercurynews.com/2020/01/26/bank-founded-by-tom-steyer-has-long-record-of-lawsuits-against-low-income-borrowers/