[Sdpg] Steward of the green Permaculture Credit Union

Wed Sep 10 21:10:21 PDT 2003

Ya'll should check out the link bellow for a great article on the PCU in the
Albuquerque Tribune.New Mexico

Steward of the green 
http://www.abqtrib.com/archives/business03/090803_business_permacult.shtml

At a credit union in Santa Fe, he keeps an eye on people's money so they 
can keep an eye on the environment

By Dan Shingler
Tribune Reporter

Call it virtuous capitalism: the idea that money can be made from promoting 
sustainable lifestyles and lending people the cash to live them.

Permaculture Credit Union in Santa Fe is at the forefront of the "green 
lending" movement, serving more than 500 members in 39 states. It has built 
its membership in just three years, despite not offering online banking or 
ATMs and requiring out-of-state members to open their accounts and do 
business through the mail.

New Mexicans and Californians make up the bulk of the membership ranks, 
with about 150 and 300 members respectively.

"There's just a huge population of people who believe in permaculture in 
those two states," said Don Sarich, president and chief executive officer.

At 33, Sarich is young to be running a financial institution. He's 
unassuming and, from his office above the State Employee Credit Union, mans 
the phones and deals with customers.

He's quick to tell a visitor, "You're looking at the one full-time 
employee," of what amounts to a financial co-op where volunteer devotees of 
permaculture help him run the institution.

The goals of Sarich's small credit union are worlds apart from large 
commercial banks. A big bank worries about the return it will garner for 
its shareholders. Sarich asks his members for donations to keep the credit 
union profitable and capitalized in its infancy. Last year, they gave a 
hair more than $44,000 to the cause.

Neither Sarich nor his board expected the institution to be making money 
yet. Sarich predicts it will reach the break-even point in the next year to 
18 months, and even that will be sooner than foreseen in its original 
business plan.

By its own measure, Permaculture Credit Union is a success and thrives in 
places where an environmentally conscious mindset is well rooted and nourished.

Those who rely on the principles of permaculture - which promote living in 
balance with the environment and not negatively affecting the planet - can 
use Sarich's credit union to finance their efforts while they put their 
savings to work funding "green causes" in which the credit union invests.

Calling his customers by first names, Sarich takes deposits and loan 
payments and, if necessary, goes out personally to see why a borrower might 
be late with a payment. For a small credit union, even one bad loan can 
hurt its standing with regulators, Sarich said.

Members can borrow money for pretty much anything, but don't expect the 
same interest rate on an OPEC-friendly Hummer as you would on an 
eco-friendly Toyota Prius.

To join the credit union, Sarich said, a person must take a course in 
permaculture design, be affiliated with a permaculture institution or, and 
here's the easy one, "believe in the ethics of permaculture."

So what exactly is permaculture? Some Mother Earth cult? Scientologists 
with gardening degrees? Something to do with Roswell?

Permaculture is an approach to land use that weaves together microclimate, 
annual and perennial plants, animals, soils, water management and human 
needs into productive communities, according to the textbook "Introduction 
to Permaculture."

Let's say you are planting a tree. If you're into permaculture, there's 
much more to it than driving down to the nursery and picking out the one 
you like best. Thinking permaculturally, there are many things to consider.

A deciduous tree that grows tall and wide will provide cooling shade to a 
home in the summer, then allow warming sunlight to reach the home when it 
loses its leaves for the winter. Taken a step further, certain trees also 
attract certain types of animals that help control insects. The same tree 
might also provide fruit for people. It will also affect air flow and can 
provide protection against wind and noise if positioned properly.

"When you plant a tree, there are nine or 10 yields you can get," said Nate 
Downey, owner of Santa Fe Permaculture Landscaping and vice chairman of the 
Permaculture Credit Union.

A permaculturist for more than 10 years, Downey helps clients with projects 
ranging from the installation of rainwater catchment systems to erosion 
control and soil building.

Once a New York City boy, Downey's success in building a 17-person 
landscaping business in Santa Fe largely around permaculture's principles 
is a testament to the movement's popularity.

Downey has been on the credit union board for the past two years.

"I wanted to see if it was going to succeed," he said. "When it seemed to 
be really taking off, I decided it was my turn to help out, and I've been 
very happy with its success ever since."

Sarich said the credit union is a natural fit for the permaculture 
movement. "There's an invisible side of permaculture, and the financial 
aspect is part of that invisible side," he said.

Working largely through word of mouth in the community of permaculture 
practitioners and teachers, the credit union has had little trouble 
attracting members and deposits. For a $50 deposit, a member gets one vote 
as a shareholder of the institution. No one gets extra shares for larger 
deposits, Sarich said - just one per customer.

Accounts of $300 or more, however, earn interest at rates Sarich said are 
competitive with what local banks pay.

The kicker is the loan program.

Sarich offers discount rates on loans for things permaculturists value - 
environmentally friendly automobiles and home improvements. Any normal car, 
new or used, is eligible for a 6.25 percent interest rate, Sarich said. But 
if the car gets 35 miles-per-gallon by federal fuel efficiency standards, 
the interest rate goes down to 5.5 percent. Buy a super-efficient car that 
gets 45 mpg or more and pay 4.75 percent interest.

Similarly, Permaculture Credit Union offers a .75 percent discount on loans 
made to pay for home energy efficiency upgrades, such as solar panels, as 
well as for permaculture landscaping and water catchment and delivery systems.

So far, deposits have come in faster than loans have gone out. Sarich is 
working to bring in more borrowers. The credit union has $2.5 million in 
deposits, up from $2.1 million at the beginning of the year.

"We just started in 2000, so it's phenomenal growth," Sarich said.

The credit union has made more than $800,000 in loans, Sarich said.

Sarich, who joined the credit union in March, has improved loan generation. 
The institution made $518,000 in loans so far this year, compared with 
$318,000 in all of 2002.

"He joined us in March, and in that first month we didn't see loans 
increase because he was getting his feet in the door and his pencils 
sharpened, but in April, May and June . . . he far exceeded our 
expectations," Downey said.

As the credit union grows, it can make larger loans. Sarich can lend up to 
$45,000 to each customer household. But that's up from $30,000 in March, 
and Sarich predicts the lending limit will increase as the institution 
builds capital and earns the trust of state regulators.

Toward that end, Sarich has kept the institution's credit quality pristine. 
"We have zero delinquencies," he said.

It will be up to Sarich to grow the institution into profitability - so it 
can be as sustainable as one of Downey's gardens.

A true believer in the credit union concept, Sarich moved from his home in 
northern Indiana to take over Permaculture Credit Union.

"If I could work for free, I'd do it for this credit union," he said. 
"That's one reason I don't buy a house. What if the credit union needs me, 
and I have to cut my salary?"

Downey laughs when asked about Sarich's dedication.

"He's told me the same thing," Downey said.

But Sarich might have little reason to worry. The board supportive of his 
efforts, Downey said, and they're not clamoring for the highest return on 
their investment.

"I'm first and foremost excited about making the world a better place," 
Downey said.

PERMACULTURE CREDIT UNION -- COME ON IN
Loans immediately available to members from any state

Join the only Credit Union that is based on Permaculture Principles and 
Ethics. Signature loans for amounts up to $5,000 at competitive rates and 
shared-secured loans at even cheaper rates up to $100,000 are available 
immediately to members. Anyone who has taken a Permaculture course, is a 
member of an affiliated Permaculture Institute, or believes in the 
Permaculture ethics is eligible to become a member for $5 membership fee 
plus a $50 share deposit.
Teachers/Organizers we can help you by offering credit-worthy students the 
ability to borrow money to pay for Permaculture courses. Contact the PCU to 
inquire about these and other loan programs.
. Also the PCU is partnering with a Credit Union in California and will 
soon be able to make loans on mortgages, rainwater catchment, home energy 
efficiency systems, solar heating and electricity systems, landscape, and 
car loans. We offer a 0.75 % discount on loans for earth friendly projects 
and Earth friendly car discounts: two types are available, .75% for 
vehicles with 35mpg or higher average and 1.5% for vehicles with 45mpg or 
higher average(which is usually the hybrid cars).

Please call us at 505 954 3479, toll free 1-866-954-3479 or FAX 505 424 
1624. Visit us online at www.pcuonline.org, email perma at pcuonline.org, or 
write to us.
Permaculture Credit Union
4250 Cerrillos Road
PO Box 29300
Santa Fe, New Mexico 87592-9300