Welcome to this latest newsletter from us at the Customer Union for Ethical Banking, the independent union for Co-operative Bank customers.
Moving towards 'structured' relationship with the bank
Our aim as a union of customers is to make sure the Co-op Bank sticks to its customer-led ethical policy and to campaign for a return to co-operative ownership. Although we’ve been able to buy a tiny shareholding in the bank, the main way we can have influence now is not through ownership – it is through having regular, direct meetings with the bank to represent your interests, put your concerns to the bank and ensure they are followed up. So our priority for this year has been moving towards a more formalised, or 'structured' relationship with the bank.
We’re pleased to report that the bank also sees the benefit in this. We have now agreed to hold regular, quarterly meetings with the Directors of Communications and Customer Experience. The first of these regular meetings took place earlier this month.
That followed our meeting with Andrew Bester, the bank’s Chief Executive, where we introduced ourselves and the Customer Union. Both meetings were positive, and we will be discussing how we might formalise the relationship further.
In recent months we have been bringing individual members’ concerns to the bank. At our meeting this month we talked about one member who has encountered problems getting charity funds to conflict areas where they are needed, which the bank is investigating.
Members of the union can contact us with similar questions on ethical policy issues. See below for how to join the union.
KPMG’s wrist slapped for audit failings
After the independent review of the role of regulators in the Co-op Bank’s near-collapse, which we reported on last month, the auditing firm KPMG has been fined £5 millionfor a "series of failings" in auditing the bank. KPMG’s failure to identify the extent of bad loans made by Britannia in the run-up to its disastrous merger with the Co-op Bank was a major factor in the bank ending up wholly owned by private funds.
We welcome the imposition of this fine. But it does nothing to address the damage KPMG helped cause. We would rather see the regulator instruct KPMG to work with the bank and its customers to develop a plan to return the bank to cooperative ownership. This could work either by finding a cooperative buyer or creating a new customer-owned entity to buy some portion of the shares in the bank. Indeed, the £5 million fine itself would be enough to buy a small but significant stake in the bank and return it to the customers.
Bank awarded £15 million SME grant following RBS bailout
The Co-op Bank is one of three banks (along with Nationwide and Investec) to win grant funding as part of the 'state aid remedy' for the government bail-out of RBS. The grant of £15m will be used to reinforce the Co-op's proposition for SMEs - including improved digital service. We asked the bank about their plans. They told us:
"Continuing to serve co-operative businesses, charities and non-profits is central to our plans for our SME banking business. Our award-winning Community Directplus account offers free banking to organisations of this nature, and we want to improve the service we provide, including improved digital services which we know is important to many of our customers. and especially the potential to use it to help strengthen its services for cooperatives, charity and social enterprise customers."
We look forward to seeing the results.
The grant comes about as a result of the government bail-out of RBS during the financial crash. The grants are intended to compensate for any distortion to the market resulting from the help given to RBS (state aid). The Co-op was not successful in the first round of grants - most of which, possibly ironically, went to Metro Bank. See links to coverage of this story on our website.
FOI request on immigration checks
We reported last month that we sent a Freedom of Information Request to the Home Office seeking to find out more about the impacts of immigration checks on bank account customers. We hoped to have a response by 3 May, but the Home Office has shunted us back a monthwhile the “commercial confidentiality” implications are considered. We hope to have more news next time.
Customer Union membership and renewals
We’re entirely independent of the bank, and rely on income from membership fees and donations to operate the Customer Union and hold the bank to account on ethics and ownership. If you are not yet a member of the Customer Union - why not join us now? For just £12 per year can help us sustain and grow the world's only customer union co-operative.
If you are a member of the Customer Union, please do look out for your membership renewal email. If you have any questions about membership just email us at firstname.lastname@example.org.
With best wishes
The Save Our Bank team
Have you joined the Customer Union yet? It costs £12 a year to be a member of the first ever customer union co-operative, and help us ensure the Co-op Bank sticks to its principles. It only takes a few moments to sign up here.