An online petition is calling on the banking regulator to order the Co-operative Bank to change its name if it is sold on to private investors.
The Change.org petition – “Protect the ‘co-operative’ name now!” – says the Financial Conduct Authority (FCA) should “stop the word ‘co-operative’ being used by a company that is not a genuine co-operative”.
It also calls on the regulator to “take all practical steps to facilitate the development of a genuine customer-led co-operative bank”.
The petition was drawn up by Edgar Parnell, a leading co-operator whose experience includes serving as chief executive of the Plunkett Foundation from 1980-2003, and is now a change agent at Co-opPundit.org.
He said: “We owe it to the members of the thousands of genuine co-operatives in the United Kingdom, to make sure that the integrity of the word “co-operative” is maintained.”
In a video supporting the petition, he added: “The UK, as the birthplace of the Rochdale model of co-operation, surely has a duty to show leadership by blocking any misuse of the term co-operative.”
“Now that the board of the Bank has announced that it is commencing the sale process and that they are inviting offers we need to be sure that the name of the Bank cannot also be sold.”
Mr Parnell pointed out that “the word co-operative is not a brand or a trademark – it is in fact a name that describes a specific form of enterprise.”
He said most countries, including the UK, have laws governing the use of the word “co-operative”.
“This is necessary to stop people into being misled into believing an organisation is a co-operative when it is not,” he said, adding that FCA guidance “places limitations on the word co-operative” in the UK so it can only can be used by bona fide co-ops.
He pointed out that when UK building societies demutualised in the 1980s and 90s, they were not allowed to keep the term “building society” in their names.
“Likewise, the continued use of the name co-operative cannot be permitted once there is no basis for an organisation to qualify as a bone fide co-operative,” he said.
“It is now our intention to petition the regulator to notify the owners of the Co-operative Bank that unless they can return to a form of co-operative ownership, then they will no longer be entitled to use the word co-operative.”
He also wants to see a new co-operative bank to enter the market.
Outlining the problems that led to control of the Bank passing into the hands of hedge funds after the £1.9bn capital shortfall was found in its finances in 2013, he said: “The management believe that they were running a conventional banking business, with the aim of profit maximisation, that just happened to belong to a co-operative.”
As a result, he said: “We need a bold and imaginative plan to ensure that a genuine customer led co-operative bank replaces the present organisation.
”We should need to mobilise all interested parties to make sure that we achieve this aim.”