Payday lenders hit Co-op Bank black listFebruary 2015
The UK’s Co-operative Bank, now emerging from two years of strife and scandal, has banned lending to businesses that avoid tax.
The ban is one of several new ethical policies introduced after a poll of 74,000 customers and staff. The bank considered other guidance from professional bodies, including the Institute of Public Policy Research.
Chief executive Niall Booker said the bank will take outside advice when deciding whether an applicant is guilty of tax avoidance.
He said: “There’s bona fide tax management and there’s tax avoidance. Some of this will be factual, and some of this will be judgmental.”
Other loan applicants to be blacklisted by the new policies are those involved in gambling and payday lending.
The Co-operative has a history of selective lending – it has refused £1.4bn ($2.12bn, €1.84bn) in potential loans since adopting an ethical code in 1992.
Another innovation on which the Co-operative is said to have decided is the introduction of the living wage from its next pay review in April. The hourly living wage is set at £9.15 in London and £7.85 elsewhere, compared with the national minimum of £6.50.
The bank’s troubles began in 2013 when Paul Flowers, a Methodist minister, now suspended, was convicted of buying cocaine and methamphetamine and had to resign as non-executive chairman. The same year a £1.5bn black hole was discovered in the accounts.
Last March Euan Sutherland quit as chief executive after ten months, saying the bank was ungovernable.
The Co-operative has since assembled an ethics council of up to 100 members to monitor its conduct.
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