In the last quarter of 2015 the Co-op Bank told a number of aid and support groups that it would close their accounts. These include the Palestine Solidarity Campaign and the Cuba Solidarity Campaign.
When we pressed the bank for an explanation we were told that this is because of new, tighter regulations on issues such as money laundering, particularly involving 'high risk' countries. We accept that the bank is under pressure to be very careful, but we think there is more that it could do to help legitimate groups that work in these countries.
When we met the bank in December we criticised the way the closures have been handled. The bank said said that they would pause new closures while they 'review communications'.
Current status - June 2016
That pause appears to have remained in place until recently, with renewed attention on accounts related to Nicaragua. The Sheffield-Esteli Society has been told its account would be closed and some other Nicaragua-related groups have been given long forms to complete. We are following these up with the bank.
We are also in discussions with Amnesty and other groups both on how to ensure that the bank gives adequate support to groups where it believes there is regulatory risk, and importantly, bringing pressure on government to take account of the needs of NGOs and human rights organisations in regulating the banks.
Otherwise we know of no other closures. We have set up a list of affected groups. Please let us know if you are aware of any group that is being investigated or has been told to close its account since December.
In its first statement to us, the bank said that it is required to perform due diligence to ensure that transfers to "high risk locations" do not inadvertently end up funding illegal or proscribed activities. We accept that the bank has legal obligations. But we think that it simply closed accounts rather than carrying out proper 'due diligence', to save costs. We fear that the bank will lose more than it saves because of the impact on its reputation as an ethical bank.
At a meeting with the bank in May, they said that they have reviewed their approach and 'have now introduced a cross-bank committee to review the policies, procedures and decisions around potential closures'. We understand this committee includes staff from the bank's Values & Ethics team. The bank also said that 'extended due diligence is being requested as part of account reviews'. Save Our Bank has made clear in the past that if indeed due diligence is necessary, then it should be performed rather than just closing accounts.
So there are signs the bank is acting on our concerns, but we also need to know more about the reports of at least one new account closure.
History of the campaign
In December 2015 we wrote an open letter calling on the bank to remember its proud tradition of supporting human rights campaigners and to help legitimate support groups to meet the bank's obligations instead of just closing accounts.
The bank responded to that open letter and we publish the response here. In his response, Niall Booker, CEO of the bank says that the decision is not the result of external or shareholder pressure and confirms that the Ethics and Values committee was consulted. He also offers to work on ways to assist legitimate transfer of funds to "high risk locations".
When we met with the bank in December put some of our concerns to them. They re-emphasised that accounts have been closed due to the bank’s assessment of risk and the cost of meeting its regulatory requirements, and not due to any outside pressure. During the meeting they made the following points, since confirmed in writing:
- The Bank is reviewing the communications it sends customers in relation to closing accounts and it won't be starting any new closures until this review completes.
- The Bank has around 40,000 charity customers and only a small number would be affected by the new risk management plan.
- Not all organisations whose focus is Palestine are facing account closure under this programme.
The Palestine Solidarity Campaign (PSC) as well as bringing a legal case against the bank for closing its account, called on bank customers to close their Co-op Bank accounts in protest.
We don’t agree with the PSC that we should all close our accounts – we explain why here.
We do want the bank to change its position. We think they have made a mistake. It is at times like this that a union of customers can have an impact.
We asked Save Our Bank supporters whether we should launch a petition on 38 Degrees to reach beyond Save Our Bank supporters, to ask the bank to reverse its decision and do more to support affected groups. Of some 400 responses, 96% said we should.
We've put that petition live. If enough people sign it, 38 Degrees may promote the campaign to its wider membership lists. So please encourage people to sign.
Updated June 2016