Customer Union for Ethical Banking

In the 1990s, the Co-op Bank had found financial success and a high profile by positioning itself as an ethical alternative to the UK’s big four high-street banks. Unusually for an ethical brand, it did this through hard-hitting TV and cinema adverts accusing the other banks of funding polluting companies or land-mine manufacturers.

In October 2013, as news was breaking that the Co-op Bank had hit financial difficulty and the majority ownership was passing to group of US hedge funds, Ethical Consumer was just completing one of its quarterly board meetings. Media stories and commentators were beginning to gloat over what they speculated would surely be the end of this annoying ethical banking nonsense. 

Ethical Consumer directors, however, began to mull over an alternative plan.

If we felt that an ethical brand of this significance was worth saving, maybe others did too? The next day Ethical Consumer set up a campaign, emailing its readers and sending out a press release saying “Don’t panic, stick with Co-op says Save Our Bank”. 

Slightly to our surprise the story was picked up by the Guardian and others, and within a couple of weeks we’d signed up more than 10,000 Co-op Bank account holders to our email list – including some major charities and campaigning organisations.

A run on the bank?

Whilst others were calling on people to close their accounts, Save Our Bank emerged as a key voice calling for people to stay put for now and fight for ethics.

Although we never really imagined that this part of the campaign had had any real impact, we learned later that it might have done. 

Quite by chance in 2022 we met someone who had been one of the Bank's directors in 2013. Throughout those weeks in October, they were holding daily calls to track account closures – fully expecting a run on the bank of the kind that had happened with Northern Rock five years previously. And although some accounts were closed, the much-feared run never occurred.

It appeared that Co-op Bank customers were somehow more 'sticky' than those of other banks and some people believed that the campaign had been a factor.

Setting up a customer union

In 2014, as the dust began to settle, Save Our Bank campaigned for the Co-op Bank to stick to its ethical policy.

Again, somewhat to our surprise, we were welcomed into meetings with key directors of the bank, for us to make our point. And when the “refreshed” ethical policy was launched in 2015 it was, as we had asked for, a strengthened rather than weakened version of what had gone before.

As it became clear that a wider campaign around ownership could take years, we came up with the idea of setting up a democratic Customer Union. And at the end of 2015, we launched a crowdfunder to ask for help in setting up this novel arrangement. This not only raised £30,000 (double the target), it also attracted over 1,000 people to become its first members – making it quite a large co-operative society and viable in the short term at least.

In the following years, and guided by formal consultation with its members now, the Union campaigned regularly for the right kind of ownership, the right kind of ethics and against poor cost-cutting decisions at the Bank. We even signed a recognition agreement with the Co-operative Bank in 2019 setting our parameters for formal quarterly meetings and other communications.

Where next for the Customer Union?

The Customer Union is still active in keeping up the pressure on the Co-operative Bank to lead and campaign on ethics. 

Co-op Bank account holders are welcome to join, and now Coventry account holders are too. 

More information about the Union, and a longer version of this article, appears on the Customer Union for Ethical Banking/Save Our Bank website.