Walden Mutual — a new digital bank focused on sustainable food — is the first bank of its kind to receive regulatory approval from the FDIC in 50 years. Its origins are unique. Founded by the former CEO of a grass-fed meat company, it is a unique amalgamation of disparate threads – digital technology, sustainable food, cooperative ownership and a strong regional focus.
I recently spoke to Charley Cummings, the bank’s founder, about his new venture and vision for a more sustainable type of bank.
Christopher Marquis: How is it that an entrepreneur who starts a successful pasture meat business ends up starting a bank?
Charlie Cummings: Well, we had developed an amazing array of partner farms in the Walden Local supply chain – a brand of sustainable local meat here in New England and New York – and it was becoming increasingly clear that they all needed capital. It pointed to a gap in the existing credit infrastructure that stretched from farms to grocery retailers and everything in between.
At the same time, there was this massive flow of capital into impact investing. There is a large segment of the population that has a strong desire to align their investments with a set of underlying values and impacts that they wish to see in the world. Case in point: Impact investing is now a multi-trillion dollar asset class (depending on who you ask). But many of the public funds trying to meet this need leave much to be desired in terms of actual impact. They are mostly “do less harm” – a model of socially conscious investing from 10 years ago or older. Today’s model asks: How do I use my capital to create positive change?
I then saw the headline that the top 10 banks had invested more than $1 trillion in fossil fuel development since the signing of the Paris Agreement… and realized that we had made the connection portrayed in “It’s a Wonderful Life” a long time ago Borrowers and depositors had lost time. People didn’t know where their dollars were spending the night!
So those were really the beginnings of the credit side of the balance sheet or the deposit side.
Then the first step was to put the team together to actually tackle this – what has become this wonderful mix of industry experts (z years) and outside experts (e.g. our VP of Product and our Head of Marketing have a combination of design, technology and food backgrounds). I am firmly convinced that this mixture produces real innovation.
Marquis: When can people open accounts and what kind of financial products do you plan to offer?
We’re opening in the coming weeks! Individuals and businesses can open “Grow Local” accounts, which are accounts that pay competitive interest rates like savings accounts but allow all the transactional features of current accounts (debit card, checks, etc.). Consumer depositors also get access to a “summer farm dividend” that they can use to spend at local farms, farmers markets and other local grocers. We also offer CDs including extended life CDs which represent a long term commitment to what we see as a long term endeavor!
And all of our loans are made to food and agriculture businesses that we focus on helping—with loan values ranging from $50,000 to $4 million or more. We have loan products for anything you might need help with – equipment finance, real estate, working capital, etc.
Marquis: I can see on the credit side that your focus on sustainable food and agriculture businesses will be beneficial to these types of businesses. How does it look on the deposit side? Do you think customers even care about your mission? How will you dress her?
Cummings: We have been very pleasantly affirmed by people’s response to our message and mission. It is quite clear that there is a large demographic of people (both young and old, urban and rural) who care deeply about things like sustainability and local food – to the point that they embrace them as part of their own identity regard. When you take that level of resonant values, combine it with the best bits of technology and design, and then add a very tangible value proposition (including financial and experiential benefits), it felt very empowering to get people excited about what we do build organically.
Marquis: What sets this company apart from what else is out there – digital banks, fintechs, credit unions, etc.?
Compared to digital banks – we wanted to achieve a similar level of excellence in UI/UX, but in the age of short-lived e-commerce brands (or “fade” as they were called) that all look and feel the same, so are we strives to have a local, tangible impact. Not only are we doing less harm, we are fostering a renaissance of our local food ecosystem and building a community around that mission.
Compared to other banks – with only a few exceptions – it seemed like most other consumer categories – clothing, cosmetics, cleaning products – had built much more compelling order-driven brands than anything you would find in banking. And a clear purpose for us – focused on local, sustainable food and agriculture – naturally lent itself to building this type of brand.
Marquis: What is the story behind the name “Walden Mutual”?
Cummings: Thoreau’s writings – and the transcendentalist ideals of living simply and in harmony with nature – have always touched me and philosophically align with the brand we are building. It’s also essentially a New England term.
Marquis: Walden Mutual received the first new mutual bank certificate from the FDIC in 50 years. Why did you organize yourself as a cooperative? What is special about this structure?
Cummings: The decision to structure the bank as a mutual – meaning the bank is ultimately owned cooperatively by its depositors rather than its shareholders – was also a natural response to the types of systemic issues we are targeting. For example, climate change and inclusivity in lending will not be solved in the next 3-5 years. Nor is selling to Global Megabank Incorporated an acceptable outcome if your goal is long-term change. So we needed an organizational structure that would align us with the long-term nature of the impact we wanted to achieve in the community. The shared structure offered real longevity in that regard.
Marquis: The bank is in the process of achieving full B Corp certification (pending at this time) and its mission focuses on “sustainable agriculture and food businesses”. How does social and ecological responsibility fit into the vision of your building?
Cummings: Well, for starters, it’s not an afterthought or side hustle – it’s our reason for being. We often say that we are really just a bank as a means to an end. Our core ethos is that everyone can make positive and lasting change in our local food ecosystem… and our mission is to essentially empower people to do so.
For individuals, we aim to be a true partner, enabling them to align their financial lives with their values as part of a broader community. For businesses and farms, we offer bespoke financing solutions from people who truly understand the nature of this ecosystem. And by connecting these two constituencies, we hope to build a more resilient and sustainable local food movement, support the vitality of our local food and agribusinesses, and promote stewardship of natural resources.
Tactically, one mechanism we’ve developed is an annual impact assessment — closely aligned with B Corp standards. It allows us to rigorously assess progress in social and environmental responsibility over time, both for individual borrowers and collectively across our loan portfolio.
Marquis: What do you hope Walden Mutual will look like in 5 years? What is the long-term vision?
Cummings: I hope that in five years we have made significant progress towards the goals of our mission; that our local food ecosystem looks significantly different – partly because of our work. I envision our market positioning evolving where we operate as a platform that creates closer connections between members of the food ecosystem (e.g. connecting food consumers more directly to the companies that produce what they eat). Imagine a real community of depositors that the bank’s borrowers actually know. And we also hope to challenge the standard notion of how a bank treats the people it serves. Today, even the most advanced banks compete to offer the same financial products and tools that have been available for years. What would it be like if a financial institution wanted to help individuals develop more mindful, emotionally healthy relationships with their money—where they feel a sense of peace that emanates from a deep alignment between their financial behavior and their values? That’s a question we hope to find answers to as we grow.