October 3, 2023
Mutual banking with purpose
Dave Fishwick is the self made millionaire from Burnley behind the Netflix film, Bank of Dave (aka Burnley Savings and Loans), a not for profit lending company that has lent over £30m into his community and puts all profits into local causes. His motivation was the 2008 financial crash and while his venture still operates to this day, his plans to become a registered UK bank have been thwarted. A local bank that actually serves a community seems to be an alien concept for the regulators but Dave is not alone in his ambition. Interesting moves afoot in Northern Ireland.
In this guest post, Secretary of the Northern Mutual campaign, Bridget Meehan, explains what sets mutual banking apart from high street banking, and why we need one for our region. To stay informed on the campaign, sign up to their e-newsletter today!
So, why a mutual bank?
We already have banks and they work fine, don’t they?
Okay, they let us all down very badly in the big crash of 2008 when they had to be bailed out by taxpayers. Plus, they didn’t help us much even when they were bailed out. And we just have to accept the fact that whatever they were doing before the crash, they’re still pretty much doing today. Not to mention that one bank is fairly much the same as the next one when it comes to what they offer us as customers.
Maybe then we’re not exactly over-the-moon about any of that and the high street banks are all there is and we have to put our money somewhere other than under the mattress. We simply must make do with the choices that are there, regardless of what we think.
The thing is we don’t have to make do. There are genuine alternatives to the high street banks and a mutual bank is one such alternative.
A BANK FOR PURPOSE, NOT PROFIT
For purpose, not profit; owned by members not shareholders; investing the money deposited in the local region and nowhere else; paying staff fair salaries but no executive bonuses; prioritising what’s best for the local economy and the environment, not financial markets and harmful industries like fossil fuels; building banking services in communities, not taking them away; widening financial inclusion, not financial exclusion, because anybody living here can open a bank account.
This is what a mutual bank can offer, alongside all the typical services you’d expect from any bank: current accounts, business accounts, overdrafts, business loans, debit cards, mortgages, electronic payments, foreign exchange; Internet banking; mobile banking.
However, having our own bank isn’t just about giving us more choice on the high street. That isn’t a bad thing in itself but it isn’t a big enough motivator to go to the trouble of establishing a brand new bank. Having our own mutual bank has more profound and significant implications.
With purpose and not profit as the driving motive, the Northern Mutual can do much more than the high street banks. The Northern Mutual can choose to put branches back into communities to ensure that decisions can be made locally and to ensure that people have direct access to banking services, to cash and to a member of staff.
The high street banks will tell you that people don’t need branches anymore and that’s why they’re shutting them down, but that isn’t the lived experience of many customers. The Northern Mutual will not refuse anyone a bank account so long as they live here. This will mean a lot to the people who have no bank account and who have no access to affordable credit.
LOCAL INVESTMENT AND COMMUNITY WEALTH
The Northern Mutual will not be permitted to do business outside of NI. That means that all money deposited with the bank will have to be invested here. This doesn’t happen with the high street banks. The money we deposit in the hundreds and thousands of personal and business accounts is routinely invested outside NI. What the banks don’t lend to people or businesses or institutions here, is invested externally for the benefit of their shareholders.
We’re not talking small change here. We’re talking billions of pounds of our money.
Think about it, all the personal accounts, all the business accounts, all the accounts of statutory bodies like councils or health trusts or schools and colleges or government departments or the public pension pot, all the accounts of community and voluntary groups or sports clubs or anybody else you can think of who needs a bank account; all of that money is deposited in high street banks. We’re not talking small change here. We’re talking billions of pounds of our money. What the bank doesn’t lend back to us is simply siphoned off and put to use elsewhere. On top of that, we don’t have a say in what they use our money for. They could be investing in fossil fuels or destructive mining or any number of socially and environmentally harmful projects.
But don’t we need that money ourselves? Couldn’t we put it to good use here? Couldn’t we help micro and small businesses with that money? Couldn’t we help new business start-ups? Couldn’t we prioritise environmental projects? What if we could invest in communities who want to generate their own renewable energy or in farmers who want to farm sustainably or in construction workers who want to build energy-efficient and affordable housing?
By allowing us to take charge of our own money and the decision-making power to invest it in projects that bring benefit to our region, the Northern Mutual could help create more jobs that are sustainable, secure and pay at least a living wage. We could become a region with a healthier economy that’s better able to meet more of its own energy, food and other needs. We could build financial, environmental and social resilience that will help us withstand future shocks and challenges and help us make a just transition out of fossil fuel use.
And all of this is why we have the campaign for the Northern Mutual. Please support us and get involved.