Tynedale Community Bank - Tomorrow we will update locals on our community lending

What is it?
Tynedale Community Bank is the brainchild and product of the work of many locals but Lauren Langton has been the lynchpin of our efforts to provide a not for profit community bank that is one step above a credit union and more local and accommodating than a High Street Bank.
High street banks have closed hundreds of branches in recent years - many of them in the North East.
Our new Tynedale Community Bank is an old-style savings and loans business; it is similar to a credit union, but on a larger scale.
People want a community lender, based in their community, with the profits going back to the community. I am absolutely certain that large numbers of people will make the decision that some or all of their money should be in our community organisation rather than a multi-national bank based far away. Why would you want to bank with a bank in Frankfurt or Shanghai or London when you could trust your money to a community bank, which is helping your local community? Thus far we have had a lot of success.

How safe is my money?
Tynedale Community Bank is regulated by the Financial Conduct Authority and the Prudential Regulation Authority, like the big-name high street banks, to ensure savings are protected as they would be anywhere else. Your money is fully regulated and protected. We are in partnership with the Prince Bishops Bank in Stanley, County Durham.

Taking on the pay day lenders: 
The bank will help fulfil the Church of England’s aim of ensuring people no longer have to rely on “payday lenders” which provide loans but charge massive interest rates. Payday lender Wonga currently advertises loans on its website with interest rates of more than 1,000%.
In 2013 the Archbishop of Canterbury, Justin Welby, said the Church would put Wonga out of business by helping local financial co-operatives play a much bigger role in helping people with money problems.

Cross Party Support:
The Labour MP, North Durham MP Kevan Jones, who is involved with the Princes Bishop Community Bank in Stanley, County Durham, is also a supporter. Kevan and I disagree on several things but we are as one on why the Tynedale Bank is a wonderful thing. We have worked together hand in glove to make is work.
At our launch in November Kevan Jones said: “People tend to look at rural areas and think there is no poverty there, but there is financial poverty in these communities. That’s why a bank like this can make such a difference.”

Media / TV coverage:
This is the ITV take on our launch. 
http://www.itv.com/news/tyne-tees/update/2015-11-06/archbishop-of-york-opens-northumberland-community-bank/

The Chronicle has done a piece on the launch last November here:
http://www.chroniclelive.co.uk/news/north-east-news/archbishop-york-open-new-community-10367546

Our website:
http://www.princebishopscommunitybank.org.uk/tynedale

Update Meeting:
We are in the Beaumont Hotel this Friday from 9.30-12. Lauren, Alastair, and other members of the team will outline what we have done, the nature of the deposits, the way in which we make loans, and how the bank works. You can also sign up for savings or a loan then.
Please come down and find out more.

The sad demise of the Co-Op Bank shows why we need local community banks

If ever we needed reminding of why the German Bank Model of the Sparkassen - in the form of local community banks that look after their area and who do not do speculative and risky lending - then the disaster of the Co-Op is the best guide. First and foremost, this is a disaster for members. On this point I will finish but let us first look at the history.

In years gone by, the Co-op, that pillar of the mutual ideal, was seen as reassuringly solid, and secure. Its shops and funeral services were deliberately lacking in ostentation. Its bank was boring, too, regarded by the outside world as a risk-averse repository for the monies of charities, non-governmental organisations and people who didn’t really like the idea of banks – but accepted the need to have one.

When the banking sector crashed in 2007 the staff and customers of the Co-operative Bank could stand back, tut-tut and shake their heads, sure in the knowledge that their forebears, the thrifty weavers who in 1844 created the Rochdale Society of Equitable Pioneers, were up there in heaven, shaking their heads, too. And then along came Paul Flowers. Rarely does that insatiable beast known as the 24-hour news cycle enjoy fare as rich as the Reverend Paul Flowers. Clerics have often been exposed as possessing feet of clay but the rotund Methodist minister, former Labour Councillor, advisor to Ed, director of the Co-Op Bank in 2009, and its chairman shortly thereafter, before becoming the architect of the Bank's downfall ... is in a league of his own. I genuinely do not know where to start on his fall from grace.

However, he has my sympathies, because when the media get their hooks into you it is not pretty, whatever his misdemeanours. I am certain he has very good qualities and will be very sad now.

But the reality is that the UK mutual sector is now damaged by two spectacular collapses. The UK’s oldest mutual insurance company, Equitable Life, was brought low by promising more than it could afford to pay out to policyholders and savers. I have spent countless days as an MP trying to help those who lost their life savings in Equitable Life. The mutual sector’s largest bank, the Co-op, has just reported large losses, insufficient capital and a Chairman who lacked the qualities of mind and character to be a successful bank chairman. It is not bust but in real trouble needing a bail out.

Noone could have a problem with a good well run mutual. This recent history should, however, be a warning of the special risks mutuals can pose. With no shareholders to provide capital and insufficient conventional profit reserve some financial mutuals can be very risky. However, if anyone came to our London Local Banking Conference will know – there are always dangers when the pursuit of profit becomes the motive of the business. Profit should result from a good service, knowing your customer and knowing your market. I again make the point that not one of the German Local Banks went bust and have actually increased bank lending in the recession.

As to the Labour party, Ed Miliband has to answer for the millions of unpaid Co-Op lons to the Labour Party, the £50,000 donation to Ed Balls, and why these moneys are linked to the recent meetings with Flowers. As to Balls the scene last Wednesday with my colleague Jason McCartney, who is a Co-Op member had to be seen to be believed. For my part this does, however, strengthen the case for Local and Community banks - not weaken it.