I switched to the Co-op bank as an ethical alternative. What a joke

http://www.theguardian.com/commentisfree/2013/nov/22/i-switched-co-op-bank

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Banks, eh? Can't live with them, can't live without them. If you don't have an account, you're a financial nonentity, able neither to receive a salary nor to pay your bills. After the 2007 financial crisis, which just keeps on keeping on, I was one of many people to decide that I was so disgusted by the mainstream banks, that I'd switch to a sustainable alternative, the Co-op, which as we now know is about as sustainable as the mixture of sulphur, charcoal, potassium nitrate and fire. The bank's former chairman, Paul Flowers, has probably snorted them all, simultaneously, in the loos at Number 10.

My only consolation is that everyone was fooled. In 2010, Co-operative Financial Services won the Financial Times's sustainable bank of the year award, beating 110 institutions from 44 countries. The runnerup was HSBC, which has since been exposed as a major player in the Libor scandal, and the bank most helpful to Mexican drug barons in need of laundering services. But what can you do? You have to have a bank account.

It wasn't always this way. Cheques, now virtually redundant, were still in the 1960s seen as something only posh people needed, in the same way as they inexplicably needed "guineas". The change, in just a generation, in the way Britons are compelled to organise their finances has been profound. I don't think it's controversial to suggest that our own convenience has not been the primary motivation for this change.

In my childhood, my parents had only a savings account, with TSB, which got swallowed up by Lloyds and has now been regurgitated. They opened a current account in the 1980s, when my dad's employers moved to cashless wage payments. By this time, I'd had my own current account foisted on me by banks flatteringly eager to attract students. The day in 1980 when I suffered the humiliation of standing in a queue to pay for groceries with a cheque, only to be told that without something called a guarantee card my cheque was a crappy piece of paper that was probably lying, will stay with me for ever.

I'd never seen how a current account worked. My dad would be paid in cash, on a Friday, in a brown envelope with a wage slip inside, and we'd go down to the various high street outlets on a Saturday to pay the bills when they were due. The insurance man would come to pick up the life insurance payments – in cash – every week. Anything left over would go in the savings account. That was how everybody did things then.

When adverts came on the telly touting Access – the first credit card I remember being introduced to the UK – as "your flexible friend", my parents would snort with derision. A credit card? The very idea was a scandal. A credit card could only ever be your inflexible enemy. It would lead to No Good. "Never a borrower nor a lender be." That was my family's mantra. Or to put it another way: "Don't, whatever you do, be a bank." Sometimes I think, post 2007, that the whole world should have been hanging on their every word.

It's easy, with hindsight, to see that things have been awry at the Co-op for some time. In 2009, for example, it was discovered that the Co-op's internet banking service crashed whenever more than 130 customers logged on at once. The Co-op bank has 4.7 million customers, so that wasn't excellent.

Then there's the mystery of the Co-op's relationship with the Britannia Building Society. Even though the Co-op took over Britannia ages ago, the services aren't integrated. Earlier this year, I wanted to move some money from my Britannia savings account to my Co-op current account. I had to go to a Britannia branch and wait while one teller did the online paperwork for my withdrawal, then go to another teller so that she could do the online paperwork to make the deposit. I remember thinking then: "Are these guys really ready to take over 600 branches of Lloyds TSB?"

Sure enough, the Co-op soon said it was backing out of the deal. Losses of £600m were revealed in March 2013, and the credit rating agency Moody's downgraded the Co-op by six notches, to junk. Then, a £3.6bn gap appeared between the value the Co-op placed on its loan portfolio and the actual sum it would raise if the bank was to sell its assets. Now the world's most sustainable bank has been bailed out by hedge funds, and a campaign to save the bank's ethical policy, introduced in 1992, has been launched. You couldn't make it up.

Nor could you make up the Reverend Paul Flowers. If the Methodist minister and former special adviser to Ed Miliband had been a character in an Irvine Welsh novel, there would surely have been a sense that Welsh was straining credibility, even by his own iconoclastic standards. But Flowers is clearly one of those dangerous people who wishes to place himself in a high-profile and respectable position precisely because he enjoys the decadent thrill of blatantly getting up to all sorts of things he shouldn't, while no one notices. A sex worker who claims he used to meet Flowers at a hotel paid for by the Co-op bank says that Flowers used to go to work having drunk and taken drugs all night, then snatched an hour's sleep. He appears to still have emails on his computer received from Flowers's Co-op email address, making arrangements.

When the video emerged of Flowers buying drugs, and the texts detailing his planned drug binges, I charitably imagined that, having destroyed the Co-op, he'd had a guilt-induced breakdown. But no. Not a bit of it. Forced resignations and convictions dating back to 1971 are now reaching the public domain.

An inquiry has been announced into how Flowers got to be chairman of the Co-op, his experience of banking having amounted to four years as a teller when he left school, no doubt mainly taking deposits from people like my parents. Labour has the cheek to suggest that the investigation is "political", designed to highlight their own links with Flowers. If I were Labour, I'd want those links highlighted myself, so that I would never get mixed up in something like that ever again. But I'm not. I'm just a Co-op customer, and I want to know how the hell Flowers got to be in charge of my bank, as this is clearly one of those situations whose investigation will cast light on the gross dysfunctionality of Britain's establishment elites. Which, by the way, is actually something else Labour should be in favour of exposing, not against. Good grief.

The saddest thing is that, in the recent past, the Co-op bank has been a progressive, admirable institution. It was the first bank to introduce free banking for customers in credit, in 1974. It was the first to offer interest-bearing current accounts, in 1982. Its ethical policy, barring it from investing in all manner of dodgy enterprises, from arms trading to sweatshops, is – on paper at least – exactly the direction that all financial institutions should be heading in.

The financial crisis ought to have been this institution's big opportunity to spearhead a move towards decent banking. Instead, it may be completely wiped out. Business secretary Vince Cable has warned that he has the power to stop the bank from using the word "co-operative" if he feels it is no longer appropriate. This guy Flowers, and his many enablers and allies, all need to be held to account by us, the public, who have to have a bank no matter how recklessly all the banks we have to choose from have conducted their business. Surely we deserve that?

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