Co-operative Bank customers could walk if new bank's articles are not stronger on ethics

Press Release - November 20th 2013

This week's revelations have once again focused attention on the problems faced by the Co-op Bank. Customers at the SaveOurBank.coop campaign remain focused on the future and how to ensure the new bank puts its principles into practice.

The Proposed Articles of Association published by the Co-operative Bank on 14th November are not strong enough to withstand commercial pressures and protect the Ethical Policy of the bank, says the campaign. The Co-operative Group has claimed that the new articles and an ethics committee will ensure that the ethical stance of the bank will be protected. However, the bank’s Ethical Policy – which sets out who it will and will not do business with – is not specifically referenced in the new constitution despite previous indications by the Bank that it has been set in stone.

SaveOurBank.coop is a campaign set up by Co-operative Bank customers with the backing of Ethical Consumer magazine. It aims to ensure the new bank sticks to its principles with an eventual return to majority co-operative ownership. The campaign has called on customers to “not switch yet” and to exercise their consumer power to influence the bank’s new private owners.

The campaign has welcomed the promise by the bank to conduct an Ethical Policy review next year, however, it is saying that much more is needed to withstand commercial pressures.

“The Bank has previously indicated that ‘the ethics are safe’ and has even run national press ads saying as much. However, there is no specific reference to the current Ethical Policy in the new constitution or a commitment to the many crucial processes that are needed to ensure that it is implemented with integrity” said Rob Harrison, editor of Ethical Consumer magazine.

“The commitment to annual reporting on ethical policies is good, but we don’t have SaveOurBank.coop campaign’s demand for an external audit. We’d also like to see some commitment to meeting the costs of running a strong Ethical Policy - costs that will come under pressure from the new hedge fund shareholders” he said.

Leading NGOs and charities including Greenpeace, Oxfam and Friends of the Earth joined the campaign in signing a letter last week calling on the bank to give real teeth to the ethical stance of the bank following re-capitalisation.

Comments

The coop bank was set up against the excesses of the capitalist banking system. It should never have gone down the line emulating the other banks. It is and always should be ethical. Now that the hedge funders and other un ethical money people have got their sticky paws on our bank they will not stop before it has been trasformed. It has to have regulation within the ethical policy to stop any and all unethical behaviour. Any small transgression will not be noticed by us lay people so we must have water tight safeguards against these monsters. The sooner they can be bought out the better but in the meantime we need total re assurance that they will not alter anything and that has not been given yet

I shall sit tight for now, but I am willing to support any actions to strengthen the articles on both the ethical policy and the external audit issues!

I strongly support this:  The Proposed Articles of Association published by the Co-operative Bank on 14th November are not strong enough to withstand commercial pressures and protect the Ethical Policy of the bank, says the campaign. The Co-operative Group has claimed that the new articles and an ethics committee will ensure that the ethical stance of the bank will be protected. However, the bank’s Ethical Policy – which sets out who it will and will not do business with – is not specifically referenced in the new constitution despite previous indications by the Bank that it has been set in stone. - See more at: http://saveourbank.coop/statement_on_articles_of_association#sthash.YHfk...

At the end of the day all customers may have to pull out.Most customers have chosen the Co-op Bnak for a very specific reason

I agree.  I am only still with the Co-op in spite of the hedgefunders and their money, because I support the ethics of the Bank, and hope something can be done to ENSURE they remain whatever the business implications.  As I write this, I smile wryly.  If they are not set in stone against all circumstances, I will change my Bank.  Where too?  I that Triodos opens a chequing account

I'm afraid I having worked in the City of London for nearly 10 years, I have no such doubts in which direction the CoOp will be coerced into. 

I've already started the switching process to a local mutual society. So far, they've had to write to the CoOp four times to get my Direct Debit instructions - still no reply.

This suggests to me, that an awful lot of us, are leaving in droves.

It's a deep deep shame.

This is becoming increasingly difficult.  I've only been with the bank two years and changed in disgust at the behavior of the main High Street banks.  I used to belong to National Giro because that felt like a bank set up for its customers.  But that got swallowed up.  It's horrendous to watch it happening to the Co-op.  But where else is there to go?  Under the mattress doesn't work any more.  I hope the new boss can get a grip.  She has a good track record but she is walking into a political and media frenzy.  I might just manage to hold on a little longer to give her a chance.  Sorting out the ethical policy in the constitution is number one.

Yes, the ethical policy should be set in stone in the Articles of Association.Is there any way we can ensure that it is?

In the meantime, we can do a bit to strengthen the rest of the group by shopping at our local stores, switching to Co-op Energy (only a 2.5% increase on a lower price than the Big Six), etc. 

We can also e-mail Osborne, Cable, Shameron et al, demanding that they stop trying to use our bank for party political propaganda and instead concentrate on what really matters: their failure to sort out and regulate the whole abnking sector.

I bank with the Coop for a reason. If the ethical policies it currently maintains are not guaranteed to continue then I will leave. I have already found a satisfactory alternative. We are watching you. 

I'm not in any way a conspiracy theorist but, watching what has been happenng over the past 2-3 years does make me wonder if the fall of the Co-op Bank was engineered.  After the mess of the financial crisis it was the one place in this country where the customer ruled, finacial greed was absent, regulations were obeyed and money was safe.  If I am right then, sadly, we will lose this fight and the principled bank we belonged to.  So - where do we go?  There is only one other ethical bank within reach - Triodos - and it doesn't operate current accounts.  Not yet anyway.

A bank that is not owned by its customers cannot call itself the 'Co-op Bank'.  WE, the customers, own the title.  If we cannot ensure the current bank upholds the customers' ethical principles (which is what most of us joined the Co-op for) then there's one other option.  Let's grab our title back and form The New Co-operative Bank.

I, also, am suspicious that the fall of the Co-op Bank was engineered (or orchestrated?). To my mind only that or perhaps that the top banking and political decision-makers and advisers involved were  "under the influence" at the time can account for the disaster. But I wonder if your assumption that all is, therefore, lost is correct and "we will lose this fight and the principled bank we belonged to".

 What if enough of us, in our thousands or more, were to keep up the pressure, should this prove necessary, for yet further in-depth inquiries into how the fall of the bank occurred and who was involved until we get the truth and for all these probings to be conducted UNDER PARLIAMENTARY PRIVILEGE and with no fobbing off with any WHITEWASHES?  A  short while ago it was reported that the Governor of the Bank of England Mark Carney was offering help to any bank that needed it. Perhaps he might be a better bet than George Osborne proves to be to assist us as the former owners of the bank.

While you are right that a bank that is not owned by its customers cannot call itself the Co-op Bank, might not our bank's new hedge fund owners find it to their advantage, currently at least, to run a bank that is truly ethical? We are at a time when it seems there is a widespread absence of trust by the public in most of the bodies that we rely on in this country to maintain a fully-functioning society and there is a growing hunger among people for integrity in the organisations they deal with. Perhaps that is why a member of the bank's staff was able to tell me last Monday that they had a steady stream of people opening accounts at the bank that day.

If the Hedge Fund takes over I'm off. I understood that the basic tenet of a Co-operative was one member one vote. I never got a chance to vote on this deal. How come an un ethical Hedge Fund got such a controlling vote? Mike P

I've been with the co-op bank for some years now & I've valued their different approach.  If that goes, if the ethical standards slip, if the focus on customers isn't strengthened then I will go elsewhere.  On the other hand, it's interesting to compare the media coverage of Mr Flowers' scandalous behaviour to the coverage of the much worse behaviour of other bankers... How many of them were using cocaine or worse?  How many have pornography on their computers?  How many use prostitutes?  We don't know, although we do know that some of them may have deliberately put their customers out of business to increase their profits (and therefore bonuses) and that many of them behaved illegally to distort markets and again increase their profits...

Investors, whoever they are, are being asked to support. The only power that
customers have is to walk: if we threaten to walk en masse to crash the bank
will make the hedgehogs think. I would welcome some guidance on the best time
to clear out.

We are investing in the Coop purely for the ethical policy.  To safeguard this is key

I say walk now.

I had my two main current accounts and credit card with Smile. I've transferred one account and the card to a mostly state owned bank for the time being. I'm leaving one account dormant with a pound in it ready to reactivate when the Co Op becomes a mutual again.

If everyone walked there would be nothing left for the hedgies to buy.

It's really hard to hang on but exploring reasonable alternatives seems a fruitless exercise - there is nothing that compares with the co-op we know and have trusted for so long. I will stay as long as possible but will need more assurance about ethics than we are receiving thus far.

If the ethics go, I go. The hedge funds can be quite clear on that. 

 

You wouldn't have expected to get a vote on recent developments at the Co-op Bank because it wasn't a co-operative in its own right, but was owned by the Co-operative Group

The only voting or consultation that members of the Co-op are offered is an occasional ballot for area representatives, who indirectly elect the Board.  In my area at least, the candidates' statements confine themselves to telling us what  worthy citizens they are, offering no competing platforms for policy, strategy or governance of the Group.

Unfortunately the troubles of the Co-op Group have by no means stopped at the Bank.  See these snippets from the Guardian:

  • 7 Dec 2013: Scandal-hit group pays former Tory aides for advice but cuts cash for ethical causes
  • 28 November 2013: "We stopped being different many years ago" - Euan Sutherland, new chief executive, Co-operative Group
  • 23 November 2013: The Labour party is facing a major financial crisis after the ... Co- operative Group told its MPs that they will slash their funding
  • 22 November 2013: ...the Co-op Group itself also looks ridiculous. Its system of promotion by election may have produced a form of democracy where voting power is so diffuse that the culture of the organisation has become inward-looking and self-obsessed.

We must hope that the current review of governance led by Lord Myners can devise a more accountable and meaningful form of democratic involvement of the 7 million members.