GUEST BLOG: Can you trust your bank?

By Niamh Goggin (Small Change)

I caught Jon Snow’s Dispatches programme on 23 July, asking Can You Trust Your Bank? You can watch it here. In my experience working in social finance for 20 years, the answer, when it comes to the mainstream banks, is that I’m not sure you can.  Many of the people who work in social finance, managing credit unions, working in community development finance institutions (CDFIs) and even setting up new banks, came over from mainstream banking.  I’ve been listening to their stories for over a decade – and I have to say they are very interesting.

When I took out my first mortgage with Abbey National back in the late eighties, I remember the hard sell they gave me for endowment mortgages.  Although I had a degree in economics and had done my homework in advance of meeting the mortgage advisor, I remember thinking “I really don’t know if I’m doing the right thing here”, as I insisted on a repayment mortgage.  When I saw endowment products fail to produce enough money to cover the outstanding debts, I was very glad that I had stood firm. In the Dispatches programme Jon Snow highlighted the mis-selling of investment products and small business loans packaged with interest rate swaps.  It is likely you have also heard stories of the mis-selling on pensions, payment protection insurance and fee-charging current accounts.

In February 2012, a campaign called Move Your Money UK  began to raise awareness about the local, mutual and ethical alternatives to the Big 5 Banks.  Since then, they estimate that 500,000 have switched their current accounts to an ethical alternative. 50,000 people have joined one of the UK’s 500 credit unions, taking their membership levels to over 1 million.  Move Your Money has played a major role in getting the message out there about local, mutual and ethical financial alternatives, with support from some of the mainstream media.

On a personal level, I support the Move Your Money campaign, using consumer power to build a better banking system. I bank with Nationwide and the Co-operative Bank (they are both listed with a good ethical rating) and used to work for Charity Bank.  Triodos Bank is another very impressive organisation.  I also strongly support credit unions and CDFI’s.  However, while consumer choice can help strengthen the better banks, it won’t really tackle the scale of the moral and ethical issues in the mainstream banks.  We’ve seen the impact of the Leveson Inquiry on the press in the UK.  I really hope the Parliamentary Inquiry into Banking can do the same.

This is a guest blog by Niamh Goggin, Director of Small Change. Niamh is working with Local Trust on Big Local.

Niamh has written a series of guides to social investment and recorded a series of podcasts to explain the concept of social investment and how it can be used to help communities involved in Big Local.

2 comments on “GUEST BLOG: Can you trust your bank?”

1. Carol on August 3, 2012 at 12:08 pm said:

   I too have moved my bank account to the Co-operative Bank and am asking all the community groups I am involved with to consider doing the same. The Co-op bank offers free banking for community and voluntary groups.

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