Bank of Dave is coming to a high street near you. Would you bank there?

We talk to founder and TV star Dave Fishwick about the new bank that half the country want to switch to

Banking is far from the most reputable of industries. In fact, in a poll last year, 75% of people said they didn’t trust bankers to tell the truth.

It’s understandable really – many see the sector as an oligopoly, with customers having little or no choice between the mainstream banks. There are some alternatives in the form of building societies and credit unions, but they’re not always easy to access and don’t have the same marketing spend as the big four.

So in 2011, entrepreneur Dave Fishwick started independent lending scheme Burnley Savings and Loans, after customers of his minibus company were refused loans from the banks. These were customers he knew well – he knew they could afford to pay back a loan, so he decided to lend to them himself.

Prison?

Fishwick says the unethical banking climate was the turning point when he realised he needed to start a bank.

“People who rob banks go to prison, but banks who rob people get paid bonuses - and that just had to stop,” he tells us.

“I just saw a huge gap in the market and I wanted to have a go and I wanted to prove it worked, and that’s exactly what I did.”

If you watched the Channel 4 series that focused on Fishwick’s attempt to create a new bank, you’ll remember he was told he didn’t have the right school education and upbringing to be a banker. He was even threatened with prison if he used the word “deposit” or “bank” to describe the lending scheme in Financial Services Authority (now Financial Conduct Authority) rules that were designed to protect customers.

Dave Fishwick

Watching Fishwick’s struggle was agonisingly frustrating at times. To the viewer following the story from the beginning, this was a man who clearly wanted what was best for the local community, offering lower interest for borrowersand more for savers than the big banks, and donating profits to charity. So why wouldn’t the authorities allow it?

Burnley Savings and Loans key facts

  • 5% AER on savings
  • 8.9% flat (typical APR 17.4%) to 14.9% flat (typical APR 29%) on loans
  • Burnley Savings and Loans uses a peer lending system with all loans personally guaranteed by Dave Fishwick
  • In the first 6 months, the bank had taken 62 deposits totalling £110,000 and made 103 loans totalling £365,000

Dramatic change

The Financial Conduct Authority (FCA) has in the last 100 years only approved one application for a banking licence from an independent. That was for Metro Bank, whose US founders were already bankers on the other side of the Atlantic. The regulator didn’t seem keen on Fishwick’s common-sense approach to lending.

But since then, it’s clear things have changed dramatically.

“At one point they wanted to put me in prison, that’s documented well. But now they couldn’t be more helpful.

“Now the whole thing’s turned round and the PRA [the Prudential Regulation Authority at the Bank of England] and the FCA are incredibly helpful. I’ve got a team of lawyers and specialists who do nothing else but this sort of thing.”

Borrowing – how much and for how long?

  • Personal loan – minimum £250, maximum £500
  • Hire purchase – minimum £1000, maximum £7500
  • Personal loan – maximum 1 year
  • Business Loan – maximum 3 years
  • Hire purchase – maximum 4 years

He’s now in the process of getting a banking licence which he says is “definitely going to happen in the next 12 months – we’ve got everything in place”, and has ambitions to open other branches of Bank of Dave outside his hometown of Burnley.

“When we get the licence I’ll make the decision of how many branches to open and how to take it to the next level,” he says.

The branches are likely to be overwhelmingly popular as a 2012 survey found more than half the population wanted to switch their accounts to Bank of Dave.

Proof it works

Currently the waiting list to put money into Burnley Savings and Loans stretches to 2015. Compared to our high-street banks, Bank of Dave is just an infant, but his books are already starting to show his “common-sense” approach works. The branch is growing – it now has seven staff, including his right-hand man David Henshaw, and lends out £250,000 a month – and is seeing the vast majority of loans paid back in full.

“Some of the businesses are now going full-term, so they’ve paid up,” he says.

“For instance, the Halal loan where David H bet me a fiver that the guy wouldn’t pay, he paid in full. We’ve got less than 1% bad debt. 99.5% of the people bloody pay, you know. This thing works. And it makes a lot of money.

“You wonder how big banks have got it so wrong - but they just got greedy. They’d rather buy lots of credit default swaps and insurance derivatives from the other side of the world, because when it goes right, they make a fortune, and when it goes wrong, the taxpayer bails them out. There’s no downside.”

Dave Fishwick

He’s had a number of offers from organisations wanting to buy the lending scheme (we’re not able to say “bank” until the licence comes through) but he’s adamant he won’t sell.

“People have been trying to buy it from me - big financial institutions are very interested in it - and I just say ‘it’s not for sale’.

“They’ve said ‘well everything’s for sale’.

“They passed me a piece of paper and a pen and said, ‘write a number down on it,’ and I said, ‘I don’t need to,’ and slid it back.”

Support

Fishwick has developed a wide portfolio of business interests. He’s the largest supplier of minibuses in the country, he has a minibus parts business, a property business and other business investments. But speaking to him in a pub in London’s St Katherine Docks on a rainy Tuesday evening, there’s no doubt about his dedication to the bank.

His near-childlike zeal is palpable as he enthusiastically scrolls through images on his iPad, showing me everything from the huge queue outside Burnley Savings and Loans when the waiting list opened for one day (the bank received pledges of £1.2m just that day), to the rejection letter he received from applying for the job of Governor of the Bank of England – “they took me seriously though! They sifted me through. I couldn’t do a worse job [than previous governors], could I?”

Several of the images show a beaming Fishwick and his exultant team with MPs and other high-profile fans. He explains he’s gathered supporters from all across the political spectrum.

“We’ve now got some very powerful friends in politics who are really keen. Vince Cable recently came to Burnley and said what I’m doing is the way forward. He’s behind us and so is Steve Baker, the All Party Political chairman for banking in Britain, he’s massively connected to us. Alastair Campbell, Chuka Umunna, William Hague.”

His political supporters helped Fishwick get banking rules changed which paved the way for the licence application. They’re likely to be helpful in the future too, as he plans to prompt the government into following his example.

“As soon as I get the licence I’m going to go to Number 10 and I’m going to explain the problems, the solutions, what we’ve done, and suggest we pilot a scheme for a while,” he says.

“Then offer all our information to the government, so that whichever government is in at the time can turbo-charge this around the country. It’s no good going to the government with a problem - they need a solution. We’ll give it to the government and let them open it up across the country and there it is - job done.

“And then I’ll go and sit on the beach or go back to selling buses.”

After a book, three series of Bank of Dave (and an international version, which brought fame around the world), an episode of Secret Millions where he opened a job centre for disadvantaged young people, and Loan Ranger – a series about payday loans – and a new property series planned for Channel 4, something tells us he won’t be able to stay out of the limelight for long.

Would you bank with Dave? Tweet me your thoughts @robynvinter

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Readers' comments (2)

  • Yes I would put my account in to his bank.
    The large three have ripped of the public and the bankers, have grown fat on the people back. They have got away with because of curropt politatins in their pockets.
    Mr N.Matthews PhD MIEE MICE

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  • Anonymous

    I run a small business and I would not hesitate moving bank, The Customer Service is appalling, perfect example...needed a US Account - 2 months later got it, the fact that it was urgent didn't seem to bother the bank. It then transpires that I had to pay £30 pm just to see the account on-line. Rip off and Con Artists, looks at SWOPS, Fraudulent transactions, Money Laundering, LIBOR Rate scam....the list continues but what do politicians do...As long as the banks pay into political parties and are involved in the oversight of banks it will never change.

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