Co-operative Bank closes Palestine Solidarity Campaign accounts
November 30, 2015
Last week it came to light that the Co-operative Bank has closed the accounts of the Palestine Solidarity Campaign and around 20 PSC-related accounts, including those belonging to 10 local PSC branches, as well as accounts relating to the Cuban Solidarity Campaign.
In a statement justifying the decision the bank said:
“We remain a committed supporter of charities which can meet the industry level requirements. However, in common with all banks, we have to perform due diligence on our customers, their accounts and the payments they make to ensure the Bank complies with anti-money laundering obligations and to manage the Bank’s risk.
For customers who operate in, or send money to, any very high risk or high risk locations throughout the world, advanced due diligence checks are required by all banks to ensure that funds do not inadvertently fund illegal or other proscribed activities. Depending on the particular circumstances it may not be possible for us to complete these checks to our satisfaction and the decision to close a number of accounts, including the PSC and some of its affiliates, is an inevitable result of this process. Unfortunately, after quite extensive research, the charities involved did not meet our requirements or, in our view, allow us to fulfil our obligations.”
When pressed by Move Your Money to explain the decision, the bank said that it was unable to divulge information about specific customers, but did say that:
“We understand that on the surface our decision may be difficult to understand and is an area where people will hold strong views, but we would like to reassure customers that the decision to close the PSC account, and some other accounts as part of our Anti Money Laundering procedures, was not taken lightly.”
Many activists and some Move Your Money supporters have called into question the bank’s ethical credentials as a result, citing the bank’s ethical policy which commits the Co-op to ‘operate with transparency and honesty,’ ‘promote human rights and equality,’ and to ‘support international development.’
Responding to these points, the bank said:
“It is important to remember that the Bank’s ethics are equally about our responsibility to our customers and colleagues to comply with these regulations, to manage the Bank’s risks properly and to build a sustainable business.
Failure to meet the requirements of adequate controls in relation to high-risk areas results in significant financial penalty, and this is a risk the Bank is trying to avoid if at all possible. Doing so is in the best interest of customers, staff and wider stakeholders.
The Bank’s values and ethics committee recognises this is about meeting legal and regulatory obligations and is not a reflection on the ethical merits of the causes concerned.”
In response, the Palestine Solidarity Campaign has launched legal action, claiming that the decision is discriminatory and contravenes the Equalities Act 2010. The Cuba Solidarity Campaign has also “not ruled out” legal action.
Sarah Colborne, PSC’s Director said
“PSC and our members are angry and disappointed at the Co-operative Bank which has turned its back on the ethical principles which drew so many of us to open accounts there in the first place. And today we will be writing to our members telling them of the Co-operative Bank’s decision and asking those who Bank with the Co-operative Bank to move their accounts.
“It is quite clear that the Co-operative Bank no longer cares about human rights – the Palestinians suffer incursions on their human rights day in, day out at the hands of an occupying force that continues to violate international law. In the UK we have a great tradition of solidarity organisations coming together to stand against human rights violations throughout the world – this is something that the Co-operative Bank should support and not punish.
“But in taking this decision it appears that the Co-operative Bank has chosen to discriminate against those who are working for the freedom and human rights of those in Palestine.”
Move Your Money exists to promote and support ethical financial institutions that help to create a just and sustainable society – both here in the UK and abroad.
As a result, we find it extremely disappointing that the Co-operative Bank would unilaterally decide to exclude groups fighting for international justice and solidarity from its services, particularly as some of them have been long standing customers who have not been found to have breached any rules.
Equally, we note that the Co-operative Bank performed far better on our ethical banking scorecard than the big 5 banks, who dominate the market in the UK. Judged against a number of areas including Honesty, Customer Service, Culture, Support of the Real Economy, and Ethics, we created the Scorecard to help individuals make their own assessments of which banks and building societies they want to support, or to avoid.
With a score of 51% the Co-operative was by no means the highest scoring bank or current account provider, though it did perform significantly better than the big 5. As a result of this, and the relative lack of ethical banking options, we will continue to support the Co-operative as one option for ethical and sustainable banking.
However, we do understand why supporters of the PSC and other groups are angered by this decision, and why they no longer feel that the Co-operative Bank is a financial institution they can support, or that they want to trust with their money.
For those disillusioned with the Co-operative Bank, there are a number of options for your ethical banking needs, including Nationwide, Coventry Building Society, Leeds Building Society, Cumberland Building Society, Metro Bank, Al Rayan Bank and Handelsbanken offering current accounts, and a whole range of alternatives offering savings, loans, and investment products.