permaculture

[Vint Lawrence <vlawrence@nets.com>]

Graham and John and others monitoring this discussion:

Several of us in New Mexico, USA have been considering these same issues
for almost five years and have recently opened the Permaculture Credit
Union. What follows are excerpts from an article for a local newspaper
which, I hope will add some input to the discussion and, perhaps,
attract some members to an existing, fledgling institution. Although we
are by no means perfect and must work within the system (NCUA and NM
FID) which restricts the rate at which we can offer services which are
strictly "permacultural", we are striving to bring these same ideas to a
place where our collective financial resources can be used for mutual
benefit.
Vint Lawrence

PERMACULTURE BREAKS NEW GROUND
A New Financial Institution Based Upon the Ethics of Earth-care
By Vint Lawrence

The Permaculture Credit Union is the first new credit union to be
chartered in New Mexico in thirty years and is possibly the first one to
be founded in the US upon the earth care principles of Permaculture
ethics — respect for natural systems, respect for people, and no waste.
In the context of banking, "no waste" means that surplus money will be
reinvested and recycled back into the community via loans that encourage
environmentally conscious practices.

For the past three years the Permaculture Institute and numerous
volunteers worked hard to establish the Santa Fe-based Permaculture
Credit Union (PCU). Approval was recently received from the National
Credit Union Association (NCUA) for depositors insurance ($100,000 per
account), and from the New Mexico Regulation and Licensing Department to
begin operation. Finally, on August 15th, the PCU began accepting member
deposits.

Many people have heard of permaculture in relation to farming, gardening
or landscaping techniques. But the ethics of permaculture can be applied
to any activity or system, including growing a garden, building a house,
operating a business, or managing and investing financial resources.

The mission of this new enterprise is to pool the financial resources of
people who subscribe to these ethical principles and create a financial
vehicle which can put these resources to work to build a sound,
sustainable, environmentally-responsible future. Through the PCU, then,
members can control the use of their money so it contributes to the
local community by supporting technologies which result in a clean
environment, healthy food and water, sustainable energy use and so on.

But What Is "Sustainable Finance?"

Actually, it's pretty simple. Sustainable systems and communities are by
their nature conservative, in the sense that they wisely utilize the
least amount of resources for the greatest return.

The resources most readily available are those within the community. Any
community which exports its resources to other regions, especially if
those resources are not truly "surplus", will eventually find that it is
no longer sustainable. Similarly, capital which is imported into a
community has its own agenda — to maximize short-term profit — no matter
what the cost to the local quality of life. This "short-term"
perspective may provide some immediate benefits, but there's a cost: the
profit is removed from the local economy.

Although many of us understand these principles as they apply to natural
systems (as the basics of ecology), we unintentionally export the
financial resources of our local communities through the ever-increasing
centralization and consolidation of the national banking system. The
result is that the surplus money from local productivity is extracted by
banking conglomerates, and the profit from these enterprises is
distributed to bank "investors," rather than being reinvested in the
local community and in local, sustainable businesses and agriculture.
This is similar to the extractive depletion of natural resources.

A Generous Dash of Optimism

During their initial organizing activities in 1997-98, the Permaculture
Credit Union received over three million dollars in pledges of deposits
from more than 800 graduates of the Permaculture Design Courses.
Although these funds have yet to be actually deposited, the organizers
are confident that the membership base exists to create and maintain a
successful and dynamic financial institution. The PCU will contribute to
the community at large and, because of its unique mission, will
establish an important precedent in the financial world. Currently, the
PCU has over 160 members and deposits over $300,000. Currently, we have
share acoounts (savings) and 6, 12, and 24 month CDs at competetive
rates. We plan to begin offering limited loan services in April or May
of this year.

Generally, traditional financial institutions are unwilling to lend
money to projects and enterprises that fall outside the normal,
"business-as-usual" parameters of their current loan portfolios. These
institutions are partially responsible for the slow pace of innovation
and broadscale acceptance of "green building," permaculture, and
ecologically sound farming practices. PCU hopes to meet this untapped
demand by making loan monies available in these areas.

For instance, the PCU could lend to private individuals interested in
solar electric, hybrid, fuel-efficient cars. There are homebuyers who
might seek mortgage financing for non-toxic, innovative, environmentally
sustainable houses. Green builders, organic growers, innovative
entrepreneurs in solar and wind energy are undercapitalized and need
loans in order to grow, prosper, and promote these ideas and
enterprises. By creating an ethically-based credit union, the PCU hopes
to be able to reward such sustainable behavior by offering better
interest rates for loans, as well as supportive loan programs for those
who lack credit ratings.

Lending Philosophy

The founding board members believe that the third Permaculture Ethic —
"Reinvest surplus toward care of earth and care of people" — is most
effectively carried out at the regional/local level. In support of this
belief, they will be recommending two principles to the credit union
membership:

Local money stays local — One concept for carrying this principle out is
locally constituted credit committees. Working within the overall
guidelines of the credit union, local committees would identify and
administer local loans. Their total available loan pool would be
proportional to the deposits generated from each particular area. This
is important since the membership of the PCU is drawn from all around
the nation.

Loans (and investments) should support the vitality and viability of the
earth, the community, its members, and the regional economy —
This principle would encourage local small business and consumer
investments that build human capital, create non-depleting economic
opportunities, encourage cooperative self-help and personal dignity, and
nourish the productive capacity of natural systems.

The PCU's organizers are confident that the effort will be successful
and will demonstrate that when we focus our finances around shared
ethical principles and objectives, we can profoundly influence the shape
of our environmental future. They believe that the structure and
philosophy of the PCU, which can link the environment with practical
economic solutions and serve as a replicable model of the connection
between ethics, agriculture, ecology, and the economy, is the true basis
for sustainable development.

What's So Different About a Credit Union?

A credit union is a nonprofit, cooperative financial enterprise, owned
and controlled by its members. The members help govern it by electing
the board of directors from the membership on the basis of one person,
one vote. Thus, when making decisions regarding the investment and
lending of the credit union's assets, this board equally represents all
members of the group regardless of the amount of money an individual has
on deposit. Income above that which is allocated for operating expenses
(the "profit") is paid back to members through dividends and/or better
interest rates on their savings accounts.

Membership in PCU is for those persons who have completed a Permaculture
Institute-recognized permaculture design course, are members of an
affiliated regional permaculture institute, and/or who subscribe to the
ethics of permaculture.

For information on becoming a member contact:
The Permaculture Credit Union (located on the second floor of the N.M.
State Employees Credit Union, on the perimeter of the Villa Linda Mall
complex at Cerrillos and Rodeo Road), 4250 Cerrillos Road, Santa Fe, NM
87505, 505-954-3479.
Online connection can be made by visiting
www.pcuonline.org