The Co-operative Bank: saving a great idea
Ryan Brightwell reports on the first meeting of the Customer Union for Ethical Banking
From the first meeting of Marx and Engels at Chetham’s Library in 1845, to the inaugural meeting of the Suffragettes at the Pankhurst family home in 1903 – Manchester has hosted no shortage of historic first meetings.
While it remains to be seen whether the first meeting of the Customer Union for Ethical Banking (CUEB), at Manchester’s Ziferblat on 19th November, will join this rich pageant, the meeting can certainly claim to be historic in its own way. As well as being our first meeting, CUEB is also the first time a ‘customer union’ has been developed anywhere, to our knowledge.
Established in February 2016, CUEB – now 1,500-strong and open for new members online – is a union of customers of The Co-operative Bank.
We have two main aims:
- to make sure the bank sticks to its ethical principles under its new hedge-fund-dominated ownership.
- To help the bank one day return to co-operative ownership.
Having evolved from the Save Our Bank campaign, we have been organising online since 2013, so the gathering was our first chance to meet members and supporters face to face and discuss strategies for achieving our goals.
Getting real about the state of the bank
The finance writer and ex-banker Frances Coppola started out the day by setting out the sobering context in which we are working. The banking sector continues to threaten the world economy. Banks like BNP Paribas have received huge fines from US regulators, making other banks, including the Co-op, jittery.
And The Co-op Bank itself is still struggling to turn itself around after the spectacular failures of 2012, and is expected to make a loss into 2017. This all has real implications for our strategy: we need to balance our ambitions for where we would like to see the bank with the reality of the problems and pressures it faces.
Nick Crofts, elected president of The Co-operative Group’s Members’ Council, struck a more optimistic note, emphasising that while the bank’s problems had once posed an existential risk to the whole Co-op Group, the bank had now been rescued without any cost to the taxpayer and the Group is ploughing on with a successful rebuilding strategy. Although the Group has no plans to sell its 20% share in the bank, what its future holds remains anyone’s guess.
Shrinking civil society space
The first major ethical concern that we have focused on over the past year arose right in the midst of our crowd-funding campaign – the Co-op Bank’s decision to close the accounts of some 40 campaigning groups, mainly carrying out solidarity work in Palestine, Nicaragua and Cuba. Peter Frankental, from Amnesty UK, discussed how it plans to challenge the bank on this issue, driven by a resolution from Amnesty members at its AGM.
Kathy Brooks from the Saddleworth Palestine Women’s Scholarship Fund, a registered charity, shared with attendees the destabilising effect of having its account closed. These moves are symptomatic of a general shrinking of civil society space, sometimes as an unintended consequence of anti-terror legislation and sometimes explicitly aimed at suppressing dissent.
How to build a co-operative bank
CUEB has already purchased a very small shareholding in The Co-operative Bank as a first step, and we agreed at the meeting to begin work on establishing a fund to build the co-operative shareholding further.
A more radical option, for example if the bank does eventually fail, is to establish a new co-operative bank from the ground up. This is exactly what Belgium’s ‘NewB’ has set out to do. Its CEO, Dirk Coeckelbergh, made a same-day-return train journey from Brussels to Manchester to tell us about their experiences: four years into the project, they believe that they are still at least three years away from having a banking licence, but already offer some financial products and have built up 50,000 co-operative members.
Needless to say, building a new bank from scratch takes patience, and also a lot of money, but NewB is proving the concept.
Growing, and moving forward
Building a new bank from scratch is not the Customer Union’s Plan A – we firmly believe that the Co-operative Bank we already have is worth saving, and that we can effectively hold it to account by sticking together.
There is certainly no lack of motivation – people travelled from all across the UK to join our first meeting – but we can have a bigger voice if we can grow our movement and ensure more of the bank’s millions of customers know we are out there. If you’re a Co-op Bank customer, you can help by joining us and helping to spread the word.
See our ethical shopping guide to Current Accounts.