Move Your Money (to a Mutual)

Home » Blog » 2011 » January » 27 » Move Your Money…

One way to chip away at the power and influence of the big banks is to simply withdraw your financial support. Move your money to a bank that has a better business model or ethics. But to whom?

The ideal option would be a true full-reserve banking: a bank that doesn’t promise you instant access to your money even though it’s lent it to somebody in sub-prime America, and one that doesn’t use fractional-reserve banking to devalue the currency and pile excessive debt upon the public. Unfortunately, until later in 2011 (more later), there is no UK bank that operates on this principle.

However, there are 49 ‘mutuals’, or building societies in the UK. Unlike normal high-street banks, mutuals redistribute their profits to members – members being the savers and borrowers. So rather than the interest you pay going towards the £7billion bonus round, or to the Qatari royal family (in the case of Barclays), it’ll be going back to other members of the public who share your bank.

Even better, building societies are prohibited by law from engaging in commodities or foreign exchange trading. So if you give your money to Nationwide or Coventry Building Society, they won’t use it to push up the price of food to the point where people in developing countries starve. That’s a nice thought!

Building societies must also make sure that at least 75% of their lending goes into residential property (i.e. mortgages), so you’re far less likely to find that that your bank has exploded due to some toxic investments.

Here’s a list of mutuals in the UK, along with the number of branches of the first few.

Nationwide Building Society (~750 branches)
Coventry Building Society (~91 branches)

Cooperative 

Triodos

Charity Bank

ZOPA

Ecology Building Society

Nationwide and Coventry offer current accounts with debit cards (like any normal bank) and will transfer your direct debits and other payments from your other account automatically. Both have UK call centres. (I have used Nationwide for the last 9 years and have never had any reason to complain).

Yorkshire Building Society (~200 branches)
Skipton Building Society (~89 branches)
Leeds Building Society (~70 branches)

Yorkshire, Skipton and Leeds building societies don’t offer accounts with debit cards, so it’s savings and mortgages only. But regardless, the interest you pay will only go to the staff and fellow customers of the building society, rather than shareholders. Likewise, the interest the building society earns by investing your hard-earned savings will be split between you and the staff of the bank, rather than between you, the staff, and short-term dividend-hungry shareholders.

A list of more localised mutuals is available at Wikipedia. Have a look for one close to you.

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  • webisteme

    Interesting post, but I’m curious why you think mortgage lending isn’t a “toxic investment.” Isn’t the housing market inflated well beyond historical levels due to a decade of asset inflation brought on by the fractional reserve system. If so, aren’t houses inflated beyond their rational prices, meaning lending that is secured by these excessive valuations is in fact unsafe? Cheers.

    • http://goodworld.lightnet.co.uk Janos Abel

      Webisteme, your question highlights the other one of the two fundamental monopolies: land (as living space) and natural resources.
      Housing prices are inflated because land supply is fixed and can not respond to increasing demand.

      In the majority of cases the plot is worth as much as the building that stands on it. The solution is shifting taxes from productive activities to Land Value created not by property owners, but everyone in the community.

      However, lets concentrate on eliminating one kind of thievery first. Meanwhile keep your money in (genuine) building societies or, even better, in a Credit Union. Find out if your locality has one.

      • Lee Hyde

        I agree with most of what you’ve said Janos Abel, except that high land prices are NOT simply the consequence of fixed supply, growing demand. They’ve grown at a rate that outstrips earnings growth for 20-30 years now; this can only happen because commercial banks have the extra-ordinary privilege to create money (from nowhere) and pump into any market they see fit. They have consistently sought fit to pump it into to the housing market (seeing it as a reliable earner) and THAT has enabled this extra-ordinary inflation of house-prices (the increased demand has most certainly had some effect – a generation of singletons has just flown the coop after all). :-)

        Ending fractional reserve banking and establishing a truly sovereign currency (one created by the people, for the people) that would go a long way to fixing the property market (though I’m sure there are other factors at play here). I do wonder though, could such reforms deflate the housing market in the short term (after all, there are so many mortgage holders out there, so many buy-to-let mortgages also)? A crash (and that’ll be painful) seems like the only viable means of correction (short of paying off everyone’s mortgages and re-setting the system, so to speak).

        Are we just to accept the obscene price levels in housing. We, the children of the babyboomers, who are expected to pay our way, and OUR PARENTS way (pensions, care for the elderly, etc…) for the foreseeable future?!

        • John_Robertson

          Lee – about your earlier comments on Zopa. http://www.p2pmoney.co.uk is a good source of information, including offers for new customers. I’ve found that Zopa and Funding circle require a log-on at least monthly because I am not good at setting-up their automatic lending settings so it’s easy to end up with a lot on their holding account at no interest. They have no current account services either – they’re for more fiddly borrowing and lending only.

          Funding Circle and Thincats allow you to be your own banker and choose which projects you invest in, with the potential to get a proper rate of interest for your risk. You can try to invest in firms that make UK jobs, or UK manufacturing firms for example.

          About your question. Most trends happen slower than expected. Remember the dot.com predictions that we would all do everything online? Well, now they are becoming true but decades later. So I wouldn’t expect a new fashion in choosing where to save to cause a disaster.

          Lastly: a discovery I don’t know where to put anywhere else. There is a thing called Aidrey Savings Bank in scotland that was founded as part of the “thrift movement” of the nineteenth century. It only accepts customers face to face, even for internet banking, so not many people can shift to it. I don’t have any inside knowledge about how it is better or worse than other banks except that it looks very straight-laced and prudent. cheers John

    • http://value2009.aekap.net nashesolnce

      There is another point of view on all the price volatility … If you decide that’s not the price of real estate is changing, and changing the ability to purchase a pound, it opens some unexpected ways of solving problems. For example:
      1 Teach a customer to objectively assess the complexity of creating products. (Webservice for example.) Or
      2 Establish an objective system of units of real value, which reflects not a game of supply and demand in the market, but the absolute complexity of a real commodity, are understood as the real value of the goods.

  • http://www.wheaton.me.uk Tim Wheaton

    Good comment by webisteme.

    Have just opened a Nationwide account though, anything to try and thwart tha bankers!

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  • http://goodworld.lightnet.co.uk Janos Abel

    Re Ben’s P.S.,

    I am sending (from my state pension) £10 a month.
    Are you helping to turn bankers back into honest, upstanding servants of the community?

  • Duncan Young

    “Unfortunately, until later in 2011 (more later), there is no UK bank that operates on this principle”

    Which bank is this you hint at coming to the uk???

    • http://www.bendyson.com/ Ben Dyson

      It’s a brand new one, in the process of being set-up (by a very competent team). I can’t say much yet but it’s looking pretty exciting. Unfortunately FSA and other red tape hurdles mean that setting up a bank is quite a slow process, but there will hopefully be something by the end of this year, if not sooner.

      • http://susanholden.co.uk Sue Holden

        I hear your advice Ben re ‘good’ banks to transfer money to. Can the Co-op really be trusted? I am wondering about the relationship between The co-operative bank and Alliance and Leiceter [now Santander]. Our paying in book [small Quaker meeting] says on the front: The Co-operative Bank good with money – Alliance & Leicester Commercial Bank 1 credit book.

        • Ben Dyson (Positive Money)

          @Sue – that’s interesting. We’re currently doing some research into the range of ‘better banking options’ and will have a lot more advice on this soon.

          • http://www.corfudirect.com Herman Mittelholzer

            Is this Bank to the Future you are referring to. If so, it sounds really interesting! I have signed up for more info.

            I have recently posted the results of my own research, having found an ethical full reserve bank called The Alternative Bank of Switzerland. Not only the safety of investing your money iwith an ethical lender but also the security of moving it into a currency still on the gold standard.

            http://www.abs.ch/en/

          • Dave

            Hi Herman I understand that your Swiss bank (The Alternative Bank of Switzerland) will only open account if you are a Swiss resident. Its a pity as I for one would open an account but sadly amd A UK resident.

          • http://www.corfudirect.eu Herman Mittelholzer

            I am not sure you are right here about residential status. I was under the impression that ABW will open accounts for foreign nationals. I will write to them and find out for you. Then get back to you.

  • http://www.iscu.org.uk Sally Chicken

    The Huffington Post campaign to “Move Your Money” has focused on credit unions as well as community banks. While the UK is a logn way behind USA credit union development, its still worth exploring .
    Credit Unions are covered by the Financial Services Compensation Scheme too

  • http://twitter.com/georgie_guy George

    Just suppose that you were more successful than I imagine you could dream with this and many thousands of people withdrew their money from the banks to place into mutuals – would this be a run on the banks, leading to another Northern Rock experience?

    • Ben Dyson (Positive Money)

      Hypothetically, yes, but it would really need to be in the millions of people, in a very short time, for it to have an effect like that.

      • http://twitter.com/georgie_guy George

        Fair enough. Millions, eh? That puts it into perspective.

    • dave

      Just wondering, the Northern Rock was/is mutual, so how is money safer with mutuals, or is this not about financial security, and just a nice way to kick the banks that use fractional reserve lending in the nuts?

      • Simon

        Northern Rock is a bank, it used to be a mutual Building Society, although the tax payer now owns a large share after the problems it had 4 years ago.

        • http://www.corfudirect.eu Herman Mittelholzer

          Northern Rock is indeed a bank. In fact it used to be one of Britain’s most dynamic building societies, specifically until it changed into a bank and adopted fractional reserve lending, and entered into the speculation market, mainly in the US sub-prime market.

          If any endorsement is required as to why we need to get rid of fractional reserve practices, Northern Rock is a prime example of why the fractional lending system can be hazardous to our economic health.

  • WR

    Can you tell me how the Co-op Bank fares in all this?

  • David Williams

    I’d like to mention a third option. I’ve been with the Co-op Bank for 30 years and they have a good ethical stance which they publish openly. I’ve found the service first class too.

  • Isabel Newth

    Why does the Co-operative Bank not fulfill your criteria?

    • Ben Dyson (Positive Money)

      Sorry – Co-op should be on there as well. Have just added it.

  • Al

    Very interesting post. Thanks for all the information.

    I think there are at least another two banks currently in the UK that should be included in your list as they operate under ethical principles as well. They are: Triodos Bank and The Charity Bank.

    What do you think? What’s your opinion on the way they operate?

    Thanks.

  • Kester

    I agree Coop and Triodos are good, but they aren’t exactly Mutuals. Coop isn’t strictly speaking a mutual anymore (used to be), because you don’t necessarily have to be a Member to be a customer/trade with them. Triodos isn’t a Mutual technically, but is very ethical and very secure, as it’s double regulated and ultimately under the Dutch Central Bank’s regulations, which are far stricter and come with a bigger deposit guarantee scheme.

    • Stuart

      The Co-op Bank is owned by the Co-operative Group, the largest mutual co-operative society in the world. Yes, you are correct that you don’t have to be a member to trade with them – but this has been the case with building societies, too, as far as I know. There have always been certain accounts which are non-share accounts, where you do not get membership rights by virtue of having the account – very often the case for small business accounts. I think only credit unions in the UK have membership as a statutory requirement before having any kind of account whatsoever.

  • Alan

    Would you consider the (non-usury) Islamic Bank of Britain to be a worthwhile consideration?

  • Lee Hyde

    One of the things I don’t get about many of these mutuals, and in particular Nationwide, is how they can have such abismal savings rates compared to high street banks.

    I’ve been meaning to transfer the rest of my accounts to the Nationwide (with which I already have same savings), but I simply can’t justify it to myself (my current bank, HBOS, gives much better savings rates – ethically dubious as they are). So what is it, are mutuals ‘hurt’ by the restrictions placed on them (i.e. not speculating rampantly on food prices/futures)? Do they prioritise their staff over their costumers when it comes to dividing the pot? Do they prioritise those who take out mortgate and loans over savers (favouring cheap mortgages to higher savings rates)?

    In any case, I think I may steer clear of the Nationwide and opt (perhaps) for the co-operative. They’re sly removal of the ‘no-fees’ policy when using your debit-card abroad has really got my heckles up (charging people to access their own money is NOT a mutual thing to do; it’s a BANK thing to do!)

    Answers on a postcard please! :-D

    • Kester

      The relatively low savings rates are in order for the Mutuals and ethical banks to be able to offer moderately low borrowing rates to home buyers and social and environmental business start-ups too. It’s not a matter of absolutely prioritising one over the other but trying to keep a fair balance.

      Some believe that ‘making money’ merely by possessing money without doing any useful work for it is not an ethical way of sustaining oneself, so the highest possible interest rate for savers is not ethically desirable, and the interest rate charged to borrowers, especially if they’re socially or environmentally useful activities, should be no higher than necessary to attract the capital needed to finance that kind of ethically positive business or other economic activity.

      The Coop, like almost all banks, charges for withdrawals abroad because they are charged by the foreign banks for providing this service. Someone has to install an ATM and maintain it and everything that goes with it and pay their workers to do so, and if another bank does that then obviously they will charge your bank for using their service in order for your bank to provide that service to you. You can always withdraw your money by a standard bank transfer direct from your bank for free, but other methods of withdrawal that cost the bank money it’s reasonable that they may have to charge for.

      • Lee Hyde

        “The relatively low savings rates are in order for the Mutuals and ethical banks to be able to offer moderately low borrowing rates to home buyers and social and environmental business start-ups too.”

        To be honest, I’m not entirely au fait with the mortgage market (not being a homeowner), but the rates offered by the Nationwide for personal loans and mortgages on the high street never seemed much lower than those offered by other banks. Competitive yes, but not so overwhelmingly low that you’d be mad not to bank with the nationwide.

        “Some believe that ‘making money’ merely by possessing money without doing any useful work for it is not an ethical way of sustaining oneself”

        I thoroughly agree with this ethos. However, the Nationwide offers ISA savings accounts with a mere 0.25% interest rate. This is not an appropriate reward for nominally forgoing access to ones money. Furthermore, if the aim is to discourage ‘making money’ from capital, why do these said same accounts offer higher interests for large deposits (1.0% on deposits above £1000). Surely, if the intention is to prevent freeloading of this nature, if anything the interest rate should decrease with larger deposit (or realistically not change at all if you still want to attract deposits).

        Now the savings account that I refer to (above) is an instant access account. Never the less, people rarely (if ever) open a savings account with the intention of draining. The intention is always to build it up (and maybe transfer any excesses to fixed term accounts as I tend to do). It’s just that to many (the poorest in society more so) having instant access to ones savings gives an added security (especially in this economic climate) an peace of mind should the worst happen and they need quick access (in an emergency. So nominal the money is still left alone.

        The Nationwide’s savings rates, tiered as they are, appear to promote freeloading on capital (making money, from money). They offer better rates (albeit still abysmal) to those who have more money to invest (people who are in a better position to live off of the proceeds of deposit interest) and whilst I understand the logic of offering better rates to fixed term accounts, these accounts are often undesirable to the poorest in society (those who aren’t likely to even be able to live off of the proceeds of their meager savings). These people have little choice but to take out instant access savings accounts which don’t even come close to compensating for inflation (not even during the low inflation days). As an ethical policy goes, it’s pretty crap.

        “The Coop, like almost all banks, charges for withdrawals abroad because they are charged by the foreign banks for providing this service. Someone has to install an ATM and maintain it and everything that goes with it and pay their workers to do so, and if another bank does that then obviously they will charge your bank for using their service in order for your bank to provide that service to you. You can always withdraw your money by a standard bank transfer direct from your bank for free, but other methods of withdrawal that cost the bank money it’s reasonable that they may have to charge for.”

        I’m aware of the fact that other charges (such as those levied by the payment processor and host banks) are unavoidable (although, with host banks, one wonders why a reciprocal agreement has not been arranged at some point. Europeans, Americans, Asians; they all come here as tourists). That isn’t what I was referring to. To my knowledge, the Nationwide never covered these charges, they simply omitting charging themselves. They reversed that decision (rather silently) and now they do charge on debit card usage abroad. Now my take on this is wrong, I apologies.

        However, how is it that specialist travel currency card companies such as CaxtonFX and FairFX are able to offer debit cards with no charges for use in other countries (and with favourable exchange rates) when banks and building societies are. Yes, there may be ATM charges, but that’s a separate issue. They don’t charge any transaction fees themselves and somehow they’ve managed to absorb the costs of the payment processors transaction fees and in the case of CaxtonFX the ATM transaction fees. As far as I can see, these companies don’t have thousands of ATM machines with which to leverage a fee waiver from foreign companies.

  • Matt Cooper

    What about Zopa? This institution actually works in practically the same way as the banking sector would work post-reform ie it is a full-reserve bank.

    • Peter Verity

      Also look at http://www.fundingcircle.com/

      It operates on similar lines to Zopa, but lends specifically to small businesses. Rates are currently a bit higher than Zopa

  • Clive Buckland-Bork

    I’ve not done exhaustive research but it would appear that most ethical accounts merely avoid certain no-no’s like investing in arms, tobacco, etc., i.e, a policy of avoiding the ‘negatives’. Whereas Triodos go the all-important extra mile and don’t just avoid the baddies but hunt out good and positive things to invest in. An active not passive approach to making a change?
    Their banking practice, they would claim, is more sound and stable than most, the implication being they only lend out what they actually have, i.e., full reserve banking, but I don’t know this for sure as, let’s face it, virtually no-one in the banking industry seems willing to offer comment about fractional reserve banking…
    More info on Triodos gratefully received if anyone can be bothered. I’d say they’re certainly worth a look. Unfortunately they don’t seem to offer a regular bank account but do offer an online ISA saver with a reasonable rate, though of course not the best. I have had ISAs with them for a number of years, but no I don’t work for them!

    • Kester

      As far as I understand, Triodos operates a full reserve across the whole bank, which is one legal entity registered in the Netherlands, with the UK, German, Belgian and Spanish branches as subsidiaries, and across the whole group it is full reserve, but currently due to different base rates in Holland and UK, it’s mutually advantageous for the UK branch to borrow at an internal low rate from the Dutch branch.

      Triodos Netherlands and Spain already offer personal current accounts with debit cards for customers living there very successfully, and Triodos UK intends to do so too in the next few years, probably by 2016 at the latest.

      The reason Triodos UK doesn’t already offer personal current accounts with debit cards (there was a year long feasibility study done it a year or two ago and decided it was not feasible yet but definitely remains an aim pretty much ASAP), is that a bank needs a certain balance and turnover before it’s cost-effective to run personal current accounts, because the services and facilities involved are quite costly both in terms of internal admin staff and external costs for services from other banks (Triodos is not big enough to be a clearing bank, so still uses RBS as a clearing bank but is seriously reviewing this because obviously RBS is scum, ethically, to put it relatively politely. The contract with RBS as a clearing bank is at least ten years old, and so it’s currently very favourable for Triodos and probably costs RBS more than it costs Triodos. I’ve challenged this too. Coop Bank might be big enough to be a clearing bank combined if Triodos contracted its clearing services through Coop, but that would mean processing all of Triodos’ customer account’ information through it’s closest commercial competitor, which is also problematic apparently).

      • Lee Hyde

        I am very, VERY interested in Triodos and am seriously considering switching wholesale to them once they have current accounts set up in the UK.

        Also, Zopa does look very interesting from both a returns and a ‘cut out the greedy middleman’ standpoint. I’ll have to look into the ethics of it. Does if offer the opportunity to specifically invest in green and/or social projects for a lower rate of return? I obviously need to visit the website and see (not that I’ll be in any position to invest anything for many a year).

      • http://susanholden.co.uk Sue Holden

        “Co-op Bank might be big enough to be a clearing bank combined if Triodos contracted its clearing services through Coop.” [Kester - Aug 24th] – Does this mean Co-op is not a clearing house right now? Is that why it says on my paying in book: “The Co-operative Bank good with money – Alliance & Leicester Commercial Bank 1 credit book”?

        • Jon B

          According to a history of The cooperative Bank it became a full clearing house in 1975.

          (Management Case Study Biography of The Co-operative Bank. [http://www.lincoln.ac.uk/bl/editorial/images/managementcasestudy.pdf])

          Sorry that does not explain its relationship with Alliance & Leicester (now Santander).

          How ever if you look back in the history of A&L on Wikipedia:

          “Early history

          The former building society was formed by the merger of the Alliance Building Society (originally based in and called the Brighton & Sussex) and the Leicester Building Society on 1 October 1985.[3] In 1990, the society acquired Girobank, a major provider of cash-handling services to the government and large companies and current accounts, from the Post Office.

          It maybe that the cooperative bank has a long standing contract with A&L for clearing services. This may be better for the Cooperative Bank than it is for new oners Santander, but thats just speculation!

          How old is your paying in book?

          A bit more digging and I think you will find it has something to do with A&L comercial bank administering the bank giro credit system, but I could be wrong.

          Anyone else any ideas?

          • Jon B

            Notice they call it a “Credit Book” not a “Paying in book”.

            Giro Credit slips are often found at the bottom of utility bills and administered through A&L comercial bank.

          • http://www.corfudirect.com Herman Mittelholzer

            I think it is because Coop use Santader as their clearing house. There was a similar arrangement between Britannia Building Society and Nat West before the Brit merged with the Coop.

            Thr Britannia, by the way, remained as a mutual while most of the big societies became banks. It’s merger with the Coop seems to have been a good and ethical choice.

          • http://susanholden.co.uk Sue Holden

            I got the information I needed about The Co-op and Alliance and Leicester from them today. It makes sense. The facility with the Post Office was originally set up with Girobank to
            allow Business Customers the ability to deposit cash/cheques through the
            Post Office network. Girobank then became Alliance and Leicester Commercial
            Bank which has now been taken over by Santander Corporate Bank. Therefore
            this is why Alliance and Leicester Commercial Bank is printed on your
            stationery.

      • Steve

        Agreed it would be good to see Triodos have a clearing arrangement with the Co-op Bank.

        The Co-op is already full UK clearing bank of cheques, bank giro credits, BACS, CHAPS and Faster Payments. It administers the 08-xx-xx range of sorting codes. It was the first new member of the clearing house back in 1975 for over 40 years. This gave the Co-op the ability to clear its own cheques and credits. Prior to this the Co-op cleared through NatWest.
        The Co-op Bank provides clearing services for other banks and building societies through ‘agency bank’ agreements. These include: MBNA, Norwich & Peterbrough B/S, Yorkshire B/S, Virgin Money (ex-Northern Rock), Unity Trust Bank, Manchester B/S, Vernon B/S, Leeds B/S (ex-Mercantile).
        Seperate to its own clearing facilities, the Co-op Bank has a commercial agreement with Post Office Counters and Santander (ex-A&L, ex-Girobank) to provide settlement services (using the old Girobank centre in Bootle). Many other commercial clearing banks also have a similar relationship with Santander’s PO facility. In essence the Co-op has two routes for clearing; one via it’s main centre in Northampton and one via the Santander/PO service in Bootle. The Santander debits and credits handled over PO counter are “cleared” via Bootle and then sent to the respective clearing bank’s central processing centre.

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  • http://www.corfudirect.eu Herman Mittelholzer

    Looking for a safe haven to protect your savings?

    Well, so was I !

    Having recently moved to Switzerland I started looking for an ethical, preferably full reserve bank. Consequently I have been on the look-out for somewhere to move my cash that will help protect it from the next coming crash. Transmuting my cash from UK pounds into Swiss Francs would have the added beneficial effect of holding it in a currency which is still on the gold standard – so doubly safe – although to be honest I think gold is a speculators’s scam and we’d be better of without it!

    Never mind…

    My research led me to discover an outfit called “The Alternative Bank of Switzerland”, who’s assets of 975 million CHF outstrips it loans book, which currently stands at 849 million CHF, thereby operating on full reserve banking principles, plus they operate ethical banking policies with full transparency on where and on what their loans are made, and operate an anti-tax evasion policy. They have been going since 1985, so not green behind the ears either.

    They take deposits from both private individuals and companies and you don’t have to live in Switzerland either. As part of their ethical principles they expressly exclude investors seeking tax evasion, and their loan book is slanted to provide funding principally for social and ecological projects.

    For more information you can take a look at their web site: http://www.abs.ch/en/ (for the english language version).

    So, that’s where my money will be going.

    Hope this help you too!

    • Douglas

      According to the ABS website, you have to reside in Switzerland to open an account. This is what it says;

      “Please be aware …

      … that the ABS is only operating in Switzerland. We only open accounts if you live in Switzerland.”

  • http://www.moveyourmoney.org.uk Occupy Bristol

    Friday 2nd December is a day of action when people in the UK will move their money out of high street banks, and into their local credit union.

    Why?

    Large sections of the population, particularly the most vulnerable are being forced to pay for the reckless mistakes of the banks, either through government cuts or recession related redundancies.

    The banks continue to perpetuate a culture of high risk and pay large
    bonuses to their top employees, in some cases with taxpayers money. In many cases these banks also use their customer’s money to invest in unethical and environmentally damaging companies.

    Credit Unions are owned and controlled by their members and exist to provide a service to the local community, not to create profit for shareholders, or pay fat bonuses.

    We are asking the public to show their dissatisfaction with the banks by voting with their wallets.

    Show your support for the campaign by clicking Attending on the Facebook event, and most importantly, opening an account with your local credit union.

  • Richard Petigrew

    Can anyone help me understand how a Credit Union actually works?

    If they are not a ‘Bank’ and can not act a as a clearing house for payments, I can not see many people moving their current accounts to such an entity.

    The largest stumbling block for me is such things as having a Debit Card (noted Co-op provides these) and Internet ‘Banking’.

    Part of the reason for not having moved my account to another ethical bank or Mutual is my concerns over payments clearing in a timely fashion and On-line transactions.

    Furthermore, does a Credit Union not ultimately have to use a Bank?

    any thoughts ‘O’ knowledgeable ones out there?

    • Graham Hodgson

      Very briefly, credit unions are membership savings and loans schemes whose members must have a common bond, eg live in the same locality, belong to the same organisation, work for the same company. Members buy shares in the union with their savings. They are shareholders, not depositors. The money contributed is lent out to other members. Within the last year or so some credit unions have started offering current accounts using Co-op Bank (or in some cases Barclays) to provide the banking and settlement services. All credit unions must have a bank account at a commercial bank to deposit their members’ money and repayments of loans. Further information can be found at http://www.abcul.org, the Association for British Credit Unions.

  • Richard Petigrew

    Well, just did it! Switched my BoS a/c to Coop bank.

    easy-peasy over the phone in 10mins!

    why wait till 2nd Dec?

  • Irenetram

    I am in Botswana & I want to know the Standard Bank charges in S.Africa when I carry transcection form Barclay Botswana .

  • murrayzz1

    I’ve been a customer of Nationwide for 22 years, and have always found their service to be excellent – until recently.

    Last week I received a computer-generated letter from the Nationwide to say that my overdraft facility had been removed.

    Note – this decision had already been taken, without any warning or consultation with me.

    When I called to discuss the matter, I was told that the reason for removing the facility was that I had been using it! I was also told that there was no way to appeal the decision, and that nobody at the Nationwide had the authority to change it.

    My credit rating is excellent, and I have been putting a four-figure sum into my Nationwide account every month since I’ve had the account.

    Needless to say, I will be moving my account without delay to another mutual that cares about its customers.

  • montmorency

    @Murrayzz1: We had a similar experience with them. I think they have changed from what they used to be a few years back. We are still with them, but I’m wary of them. We also have accounts with the Coventry, whom I prefer.

  • Jonathan

    If this article is anything to go by it appears UK building societies practice fractional reserve banking just like the banks and so effectively lend money “out of thin air” so long as they have at least 3% of real money to back it up:

    http://www.guardian.co.uk/business/2013/jun/28/barclays-warns-on-new-capital-rules

    Fractional reserve has in many ways driven our boom-bust economy in recent times. As it is mainly used to issue new money as mortgages it drives property price inflation until it reaches unsustainable levels. If you default your property as well as your real money is up for grabs. It is a total con trick.

    AND governments claim they cannot issue new money to fund their economies, for instance the UK government to pay off the deficit, because that would create inflation and yet they are very happy to let banks create this new money. New currency being issued by itself does not create inflation – it is all about giving the power over society to the likes of the banks and those who really control them.

    I’m with the Nationwide and now I know they practice this I’m worried.

  • Siamak

    In your article you’ve forgotten to mention that almost all mutual building societies / banks pay interest on only part of the savings and 0% and the remaining and in reality there is no difference between the mutual and non-mutual building societies. For example, one of lenders you’ve mentioned in your article pays 3% on the first £2,500 (and that is only for 12 months dropping to 1% thereafter) and %0 on the remaining saving. All other “mutual” building societies in your list have identical practices with small variations on initial / continuing interest rates.

    Lets expand on this example; If one happens to save more the £2,500 with the lender (say £10,000). The saver get interest of 3% for 12 months and 1% thereafter on the first £2,500 while the building society pockets the interest on the remaining £7,500? It is important to remember that the the remaining £7.500 is not dormant and used by the building society to generate interest by lending it to savers in the form of Loans pr Mortgages.
    Let me put this another way by using the earlier example; the lender offers a 3.6% APR (Overall cost for comparison) mortgage rate. Assuming that this rate remains the same in the future (considering that currently we’re enjoying some of the best mortgage rates ever) then for a mortgage of £300,000 the borrower will be paying an interest of 3.6% applied to full amount of the mortgage while a saver receives interest of %1.0 only on the first £2,500 (after a year of %3.0 honeymoon of course). This practice is immoral and shameful.

    Don’t you think you should change your camping to “Awarding Mutual Status to Real Mutual Financial Institutes”.

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