At the end of last year, news emerged that the Co-operative Bank was closing the accounts of many campaigning and solidarity groups that have links to Palestine, Cuba or Nicaragua. In response to the closures, Save Our Bank launched a campaign asking The Co-operative Bank to reconsider their decision. So far, the campaign has attracted more than 6,000 signatures.
But for some, the move was the last straw, prompting the question: should I stay with a bank that has traditionally provided a real ethical alternative, or should I go? If I go, where to?
The Co-operative Bank was quick to assure the public that the decision was based on the bank’s need to comply with anti-money laundering obligations and to manage risk. “We would like to reassure customers that we apply consistent criteria when dealing with all customers and countries and this decision is about adhering to our obligations under the law and not about arbitrary decisions or any form of discrimination or inequality,” a statement said at the time.
Co-operative News has received several letters about the closures, some of which are from Co-op Bank customers who have decided to close their own accounts in protest. One such letter came from co-operative writer and historian Alun Burge. “Taking action against the Wales NSC (Nicaragua Solidarity Campaign) was enough for me,” he wrote. “It had been with the Co-op Bank for 29 years! I closed my account last week. I’d been in the Co-op Bank for over 40 years until then.”
There is nothing to suggest its hedge fund owners have an ethical approach
Jo Bird, of Co-operative Business Consultants, also got in touch. “Solidarity groups give great support to co-operatives in the Middle East, Central America and elsewhere,” she said. “The ‘Co-operative’ Bank is effectively undermining the co-op movement in these regions, in total disregard for Principle 6 of co-operatives.
“The ‘Co-operative’ Bank claims to be ‘the only UK Bank with a customer-led Ethical Policy’, but there is nothing to suggest its hedge fund owners have an ethical approach. Co-operative Business Consultants opened a bank account with Unity Trust, because the Bank is majority owned by democratic membership organisations (ie trade unions) and we are delighted with Unity’s excellent customer service. CBC has closed its account with the ‘Co-operative’ Bank.”
Fionn Travers-Smith, campaign manager for Move Your Money, was particularly disappointed, “as the decision was taken with no opportunity for the campaigns to respond to the bank’s concerns”.
He added: “As a result, it’s easy to see why many people feel the Co-op have acted unfairly, and many will want to move their accounts in response. Fortunately, there are more ethical and alternative banks and building societies than ever, while the current account switching service makes it easier, quicker and safer to do so.”
Move Your Money’s suggestions for current account providers include Cumberland Building Society, Coventry Building Society, Leeds Building Society, Nationwide and Metro Bank.
As Jo Bird pointed out, Unity Trust Bank could also be a good option for day-to-day banking and finance services for co-operatives, charities and other organisations. Unity is a Living Wage accredited employer and holds the Fair Tax Mark in recognition of its fair and transparent accounting approach. The bank uses customer deposits to ‘lend to organisations that are making a clear social impact in their local communities’. Prior to December 2015, the Co-operative Bank owned 26.7% of Unity, but Unity has now bought back the majority of those shares.
When it comes to savings, Ecology Building Society is worth a look. Gill Lancaster, savings manager at Ecology, commented: “Our mission is to build a greener society, so we offer a range of competitive ethical savings accounts that offer long-term value and which fund our sustainable mortgage lending for properties and projects that respect the environment. This means we use our members’ money responsibly for positive environmental and social outcomes. We treat all of our members fairly, regardless of the amount of their savings or how long they’ve saved with us.”
Triodos Bank has seen a number of enquiries from individuals following the Co-operative Bank’s closure of the solidarity groups’ accounts, but have also seen a wider increase people choosing to bank with them, with numbers up 9% in the first half of last year. Customers include Zaytoun, a community interest company selling Fairtrade artisanal Palestinian produce.
Huw Davies, head of retail banking at Triodos, believes that “banking can and should be a positive force for good”.
He says: “We only lend to organisations which are actively delivering positive social, environmental and cultural benefits, from organic farms to co-operatives. And because we’re completely open about who we lend to, our savers can see exactly where their money is working.” Triodos currently offers a range of finance services and plans to launch a personal current account later this year.
Charity Bank is another option for savings. “What drives us isn’t profits, but a shared idea about the world we want to live in,” says Cal Bull-Edwards, of Charity Bank.
“We were founded to support charities with loans that they couldn’t find elsewhere and to show people how their savings could be invested ethically and in ways that would make them happy. We put peoples’ money where their values are and together we work to create lasting social change in our communities. We are an ethical bank for everyone who knows that banks can do better.”
Credit unions are also worth considering.
But has the time actually come to move from the Co-operative Bank, or should customers instead be seeking to affect change from within?
“This action by the Co-op Bank is the result of a commercial decision to reduce risk,” Shaun Fensom of the Save Our Bank campaign. “Save Our Bank is campaigning to get the bank to work harder with legitimate groups to help them safely transfer money to higher risk areas. We think there is a lot worth saving in the Co-op Bank, which has a superior ethical policy and is 20% in Co-op hands.
“We call on customers to stay with the bank and join with us because we have real influence if we are organised. That is the co-operative way.”
- For more information on ethical banks and building societies, visit: moveyourmoney.org.uk/scorecard-explained
In this article
- Alun Burge
- Building society
- Central America
- Charity Bank
- Co-operative Business Consultants
- Coventry Building Society
- Cumberland Building Society
- Fionn Travers-Smith
- Gill Lancaster
- Huw Davies
- Jo Bird
- Leeds Building Society
- Metro Bank
- Nicaragua Solidarity
- Retail banking
- Shaun Fensom
- The Co-operative Bank
- Triodos Bank
- UK Bank
- United Kingdom
- Top Stories