Bank of Dave Two: How one man took on the FSA and won
I NEVER wanted to be a banker. But back in 2008, my minibus company in Burnley had a problem. My customers were coming to me for new buses, and needed finance to buy them – as they had done for 20 years. As soon as the credit crunch hit, however, the banks suddenly stopped lending overnight.
So either I stopped selling minibuses or I had to start lending out my own money. I chose the latter. Everyone paid me back, proving there was nothing wrong with the British public. But I wanted to go further. I realised there was a gap in the market and banking didn’t seem that difficult. It just needed to be taken back to the old fashioned days, when the bank manager knew you and your family, and would even sign your passport application. That’s why I started Burnley Savings and Loans.
But I faced another problem. Due to the huge barriers to entry, only one bank has gained a retail license over the last 100 years – Metro Bank. I’m not even allowed to call what I do a “bank” because of the way the regulation works. The biggest hurdle was that, by deciding to start a community bank, I needed millions of pounds in reserve and would have had to spend more on licensing and infrastructure. I was never going to have more than £4m in savings or out on loan, and my “bank” used to be a florist’s shop on Burnley high street. It just didn’t make sense. Regulation should fit the size of operation you’re opening. All I needed was a 100 per cent guarantee to savers, and that’s exactly what we offer.
For a long time, I felt like I was trying to stick a square peg in a round hole. When you’re applying for a full blown banking licence, you come up against massive hurdles geared towards huge multinationals. Luckily, the FSA thought what I was doing was admirable, and Channel 4 has been brilliant. Through sheer determination and campaigning, as well as huge political support, we have reached an understanding with the FSA. There’s now even talk about making it easier for new banks to gain licenses.
But to get people to believe in a new idea, you have to prove it works. This is what I did in the first series of Bank of Dave. As you will see in Bank of Dave 2, which airs on Channel 4 tonight, I’ve now gone to Parliament to show them my success. Politicians have started to take me very seriously and I’ve received help from MPs of all parties. I’ve had enormous support from Steve Baker MP, in particular. He’s asked me to write a paper, using all my research. Hopefully some of my findings could be used in the government’s Finance Bill and we can have better banking in Britain forever.
Britain needs a community bank in every town and city across the country, run by the community for the community. There’s over 2,000 towns and cities across the UK, and the Bank of Dave alone is set to lend to 1,000 businesses over the next three years. If there was one community bank in each of those towns, all lending to 1,000 businesses over the next three years, we could rescue 2m businesses.
I went from being a builder’s labourer at 16 to having my own “bank”. I just want others to be able to do the same.
Dave Fishwick is a Burnley-based businessman. Bank of Dave: Fighting the Fat Cats is on Channel 4 tonight at 10pm.