Co-op Bank faces legal action over Palestine account closures

The Palestine Solidarity Campaign (PSC) has launched a legal case against the Co-operative Bank, which closed its account in October. The Bank also closed the Cuba Solidarity Campaign’s...

The Palestine Solidarity Campaign (PSC) has launched a legal case against the Co-operative Bank, which closed its account in October. The Bank also closed the Cuba Solidarity Campaign’s account and closed or denied the accounts of another 20 organisations working for Palestine, including PSC branches in Abergavenny, Bristol, Cambridge, Norwich, Nottingham, Oxford, Plymouth, Sheffield, the West Midlands and York.

Other groups affected include the Boycott Israel Network, Computers for Palestine, Discover Palestine, International Women’s Peace Service Palestine, Yorkshire Palestine Cultural Exchange and three scholarship funds.

PSC says the Bank’s decision is discriminatory and contravenes sections 13 and 29 of the the Equality Act 2010. The Bank says the decision was based on its legal obligations, not any form of discrimination.

ITN solicitors, acting for PSC, said the Bank’s failure to explain its actions or provide appropriate disclosure led it to believe the decision was based on PSC’s belief in Palestinian rights, including the right to oppose Israel’s occupation of Palestine and its violations of international law.

It said: “Our clients have been refused banking services, without any reason or an opportunity to provide representations. Our clients have therefore sought a full explanation from the Co-operative.

“It appears that the decision was taken because of PSC’s support for Palestine. A decision based on active support of Palestinian causes – or on the nationality or religion of the Palestinian people – would be discriminatory. It is in the wider public interest to ensure that banks are held to account for their decision making processes; a bank cannot be above the law by virtue of its status.”

The Bank is under fire from customers over the closures

“The Co-op Bank has turned its back on its ethical principles,” said Sarah Colborne, director of PSC. “It has a glossy 27 page document which proclaims it believes in ‘acting with honesty and transparency… treating customers fairly, [and] promoting human rights and equality’. It’s very hard to see any evidence of these principles today.

“The Palestinians suffer incursions on their human rights day in, day out at the hands of an occupying force that continues to violate international law. In the UK we have a great tradition of solidarity organisations coming together to stand against human rights violations throughout the world. This is something that the Co-operative Bank should support and not punish.” PSC is asking members and supporters who bank with the Co-op Bank to move their accounts.

Steve Thompson of Principle Five, the Yorkshire Co-operative Resource Centre, has already pledged to do so: “I’ve had an account with the Co-operative Bank since 1971,” he said. “I chose the Co- operative Bank because I knew that it was decent and ethical.

“It seems that this is no longer the case. I’m ashamed to write a cheque which bears the name ‘Co-operative’ when the bank is anything but. For this reason I’m in the process of switching my account to another provider.”

The Co-operative Bank said it was committed to supporting charities which met industry requirements: “We apply consistent criteria when dealing with all customers and countries,” it said in a statement. “This decision is about adhering to our obligations under the law and not about arbitrary decisions or any form of discrimination or inequality.

“We have to perform due diligence on our customers, their accounts and the payments they make to ensure the Bank complies with anti-money laundering obligations and to manage the Bank’s risk. This is part of our normal banking processes and is an area where the Bank has made some changes recently to bring it into line with the industry generally.

“For customers who operate in, or send money to, any very high risk or high risk locations throughout the world, advanced due diligence checks are required by all banks to ensure that funds do not inadvertently fund illegal or other proscribed activities. Depending on the particular circumstances it may not be possible for us to complete these checks to our satisfaction and the decision to close a number of accounts, including the PSC and some of its affiliates, is an inevitable result of this process. Unfortunately, after quite extensive research, the charities involved did not meet our requirements or, in our view, allow us to fulfil our obligations.

“This doesn’t mean that we cannot or will not facilitate humanitarian, educational, medical and human rights donations to the Gaza region. Médecins Sans Frontières‎, the British Council, Amnesty, ActionAid and Oxfam all do excellent work in these fields in Gaza and elsewhere and we make regular donations to some of these organisations through our current account and credit cards.”

The Save Our Bank campaign is raising funds for a union of Co-op Bank customers
The Save Our Bank campaign is raising funds for a union of Co-op Bank customers


Save Our Bank, which campaigns to make the Co-op Bank more ethical and co-operative, said the Bank’s statement left questions unanswered. “If the PSC did not have sufficient controls in place, what should groups wanting to support Palestinians do to ensure they meet the Co-op Bank’s standards?” it asked. “Given the urgent humanitarian needs in the Palestinian territories, the Co-op Bank needs to enable legitimate charities to make transfers.”

In an open letter, Save Our Bank calls on the bank to reconsider its decision. “This is the first serious ethical misjudgement since the Bank has come under its new ownership,” the letter says. “We call on the Bank to take urgent remedial action before it causes further damage to its credibility and undermines its claim to offer a genuine ethical alternative in the UK market.

“We think this answer shows a poor understanding of why many customers have chosen to bank with the Co-operative. It is precisely because the bank was not ‘in line with the industry generally’ and was prepared to take risks in support of human rights that the Bank’s customer offer was attractive.”

The letter says Save Our Bank supporters found ‘a general lack of attention on the importance of ethical issues across the business’.  It asks whether the Bank’s Values and Ethics Committee were consulted on this decision and whether its impact on the Bank’s ethical customer base was considered.

It calls on the Bank to work with affected organisations to overcome legal or regulatory obstacles and to assess how it could better have fulfilled its obligations under its ethical policy, publishing its findings.

Shaun Fensom of Save Our Bank says the Bank has handled this badly: “This is undoing the good work the Bank’s done to rebuild trust with its expanded ethical policy, its generous funding for co-op development and bold moves like signing the Paris Pledge to steer clear of the coal industry,” he said.

“The bank is saying it has regulatory obligations to make sure that when money is transferred to high risk locations it doesn’t get into the wrong hands. We can understand that may be an issue, but rather that telling account holders where the problem is or suggesting ways of fixing it, they’re just closing accounts. We want a bank with ethics to try harder than that.

“Some customers have closed their accounts in protest. We understand that. But we believe the best way to challenge this is by sticking together and bringing pressure as a group. We say don’t get mad, get organised.”

It will continue to set up a customer union, which will challenge the Bank on issues such as this, and will launch a petition calling on the Bank to stop closing accounts and do more to help affected customers.

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