Save Our Bank

The Co-operative Group had been forced to make an ‘historic compromise’ with private capital to prevent the collapse of its banking arm. The stakes were high: failure of the bank would probably have meant the end of The Co-operative Group itself – the oldest and most iconic co-operative in the world. A rescue was arranged without state intervention (in contrast to the rescue of Lloyds and RBS in 2008), but at a price.

Late in 2013, a deal was struck with people who had lent the bank money, including several US hedge funds, giving them a 70% share of the bank. The Co-operative Group remained the largest shareholder. But it had lost overall control.

For many customers the first instinct was to leave for Nationwide or one of the other mutuals. With US hedge funds in control, what chance that the bank would maintain its world-leading ethical policies and brave campaigning?

Aims of the Campaign

The Save Our Bank campaign started with the belief that something good could be saved if the customers who cared about ethics were organised – because without customers any bank is worthless – something even a hedge fund understands. Over 10,000 supporters signed up to an on-line campaign calling on the bank to maintain its ethical policy and for an eventual return to co-operative control.

For many loyal customers, Save Our Bank offered a way to make their feelings known without leaving – a point not lost on the bank.

The first challenge for the campaign came when the new management said it would survey customers about a renewed ethical policy. Surveys can be manipulated and this could be used as an excuse to water the ethical policy down, for example by downplaying ‘political’ concerns like human rights in favour of promises to ‘treat customers fairly’.

Ahead of the survey, Save Our Bank supporters put huge pressure on the bank by writing, emailing and tweeting. Eventually the CEO of the bank stated publicly that no existing commitments would be dropped. The bank asked Save Our Bank for advice on the content of the survey.

The new policy was finally announced in January 2015 after more than 70,000 customers had taken part. The bank kept its promise – a close reading showed that on all but a couple of minor issues, the existing policy was unmolested. Plus there were significant new commitments. Critical but positive engagement with the bank had paid off.

The Customer Union for Ethical Banking

The Save Our Bank campaign proved that organised customer pressure can produce results. As the campaign progressed, the question became how to sustain it. And what could customers do to help bring the bank back under co-operative control?

Save Our Bank decided to create a ‘customer union’ – so far as we know this has never been tried before. Members are asked to pay a small subscription of £12 per year to fund the union, which keeps an eye on the bank.

A crowdfunding campaign to set up the customer union raised more than twice the target of £15,000.

The Customer Union for Ethical Banking is an independent body representing customers of the Co-operative Bank. The Customer Union has two aims:

1. to ensure that the bank sticks to its word on being an ethical bank with customer-led values

2. to see an eventual return of the bank to majority cooperative ownership. The union is a co-operative itself, democratically controlled by its 1,200 members and regulated by the FCA.

In 2019 the bank and the customer union by signing a formal ‘recognition agreement’. This was modelled on the sort of agreements that trades unions sign with employers. Formal recognition gives the bank a way to show that it takes the concerns of ethically minded customers seriously, and is not frightened of scrutiny on this issue. For the customer union the recognition underlines the real influence it has, which in turn helps attract new members, so increasing the influence further. Arguably, and perhaps ironically, members of the customer union have more influence on the direction of the bank than members of the Co-op did before the bank was sold.

Join the Customer Union for Ethical Banking - only £12 a year

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Product guides to ethical banking and ethical business banking.