Welcome to this August newsletter from the Customer Union for Ethical Banking, the independent union for customers of The Co-operative Bank and Coventry Building Society.
We hope you've enjoyed your summer, and coped with the multiple heat waves. In this month's newsletter: a new switching offer from the Co-op Bank is a positive signal, but we're seeing a pattern of poor communication to (and about) co-ops - and, breaking as we go to press, big news on the bank's transfer to Coventry.
Breaking: Bank's business to transfer to Coventry from 1st January
We've learned this week that the Co-op Bank's business is expected to be formally transferred to the Coventry Building Society by 1st January 2027. The Co-operative Bank and smile names will continue to be used, and many bank customers will become members of the Building Society. Deposits under the Financial Services Compensation Scheme will be protected up to a single £120,000 limit which will cover the bank, smile and the building society. We're disappointed that the announcement isn't clearer about what this means for the bank's Ethical Policy, which is not mentioned in the FAQ. See the bank's announcement here. We'll be looking into this in more detail in the coming weeks, so do let us know if you have questions.
Not a "takeover" - a re-mutualisation
We've noticed some odd coverage of this news in the press, with headlines about a "rival", "taking over" or moving customers, as if this were some kind of hostile customer grab. That's not how we see it. The Customer Union (and Save Our Bank before us) has campaigned since 2013 for the Co-operative Bank to return to mutual ownership. This transfer is the culmination of that: the Bank becoming part of a mutual, member-owned organisation again, with many customers set to become members in their own right. We'll have more to say on this in the coming weeks - including on the Ethical Policy question above.
£300 for co-ops to switch
The Co-op bank is offering up to £300 to registered charities, co-operatives, credit unions and community-interest companies, for opening and switching to the bank's Charity and Community Bank Account and opening an eligible savings account. It also removed the previous £2m turnover limit so organisations of any size can now access the account.
We see this, alongside the current £200 offer for personal customers, as a sign the bank is confident and looking to grow, including by taking on larger charity and co-op customers.
Time for a Co-operatives Account?
Why, though, is the bank lumping community groups and co-ops together like this? The cooperative and mutual economy includes major UK businesses like the Co-op Group, Arla Foods, Dale Farm, John Lewis, Richer Sounds – to name just a few from Co-op's UK's top 30. (See its authoritative Co-operative and Mutual Economy report.)
None of these businesses are charities, and they are certainly not community groups either. If the Co-op Bank wants to be the default bank for the co-operative sector, it should speak to them as a sector with its own needs and priorities, not lump them in with village church choirs and the like. We'd like to see the bank offer a dedicated Co-operatives Account, and make sure it speaks to co-ops as distinct from charities and communities.
Save the Date for our Gathering!
We're planning our annual Gathering for Saturday 21st November, 12pm–3pm - do pencil it into your diary, and we'll be back with a link to register soon!
To help a wider range of people to join, we're making this a shorter gathering: one hour of formal AGM for members, and a one hour open session for everyone, with a chance to hear from the bank and ask them questions. So if you can only join for an hour, this one is for you.
And for those who can't make a Saturday afternoon, we'll be planning some additional evening gatherings in the first part of next year. Watch this space.
That’s all for this month’s newsletter; thank you as ever for reading and for supporting the Union.
With best wishes
The Customer Union team
Have you joined the Customer Union yet? It costs £15 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. We also welcome Coventry Building Society members. It only takes a few moments to sign up here.
This version of the newsletter was modified following clarification from the bank on the integration process and timing.
