Co-operative Bank

It is difficult to see the withdrawal of banking facilities for the Palestine Solidarity Campaign and the Cuba Solidarity Campaign by the Co-operative Bank as anything other than a nakedly political act. As the Daily Torygraph crowed on 29 November:

Activist group linked to Jeremy Corbyn has accounts closed amid fears it may be funding terrorism”.

This would only be true if by “terrorism” they meant standing up to the illegal occupation of the West Bank by Israel and the illegal blockade and harassment of Cuba by the USA.

The Co-operative Bank itself responded much more diplomatically than the Torygraph. In a letter to me in response to my complaint about their action, they said they had withdrawn banking facilities because PSC and CSC “sent money to high risk locations [requiring] high diligence checks to ensure the funds do not inadvertently fund alleged or proscribed activities” and “after quite extensive research [they] did not meet our requirements”.

The Palestine Solidarity Campaign has launched a legal case against the Co-operative Bank claiming that the Bank’s decision is discriminatory and contravenes sections 13 and 29 of the Equality Act 2010. ITN solicitors, acting for PSC, said the Bank’s failure to explain its actions or provide appropriate disclosure led it to believe the decision was based on PSC’s defence of Palestinian rights, including the right to oppose Israel’s illegal occupation of Palestine and its violations of international law. We wish them well, but whether they will secure adequate compensation remains to be seen. Don’t hold your breath.

There was once a good reason to bank with the Co-operative Bank and its internet banking arm, Smile. While never a true co-operative, it was owned by the Co-op and therefore arguably part of the co-operative movement and apparently distinct from the capitalist banks that had held the nation to ransom in 2006. The Co-op Bank was very appealing to socialists for their personal banking and indeed anyone who wanted to disassociate themselves from the bangsters. It was for this reason that we continued to bank with it, not its always somewhat specious “ethical” banking policy. Unfortunately, this appeal has vanished: the Co-op had its own problems requiring it to sell off businesses and the Co-op Bank engineered its very own and quite separate mini banking crisis, necessitating a “rescue” in 2013-14 to address a capital shortfall of some £1.9 billion. As a result 80% of it is now owned by the worst type of predatory capitalist: hedge funds. In theory the ethical banking policy remains as a marketing ploy, but who are they trying to kid? It was never much of an attraction and their decisions on PSC and CSC shows it up for the sham it always was.

Legislation requires financial advice to be surrounded with such weasel words as

Information on this website should not be taken as financial advice or seen as an endorsement of any particular product. We’ve provided information so that you can make an informed choice about where to move your money, and if necessary, you should consider speaking to an independent financial advisor.

Take that as read – provided you understand that a so-called Independent Financial Adviser is actually a salesman who earns commission from the businesses he/she recommends. But what you should do if you still bank with the Co-operative Bank or Smile is to dump them just as they dumped PSC and CSC and switch to a building society such as Nationwide that offers banking services. But don’t prevaricate like the Co-operative Bank itself did: tell them exactly why you did it.