CEO and chair put own money into charity after bank closure

13 Feb 2024 News


A chair and chief executive of a local charity have put in more than £40,000 of their own money after the organisation’s bank account was suspended.

The Cumbria Deaf Association’s account was shut by Barclays in October 2023 over a disagreement about paperwork for the banking mandate, the charity said.

Chief executive Caroline Howsley said she lent £38,500, alongside £5,000 from the chair, to pay for essentials, such as staff salaries.

The charity has now had its bank account reinstated by Barclays, which offered £400 in compensation, and Cumbria Deaf Association is in the process of applying for an account with the Co-operative Bank.

She said they have not got all their money back yet, as not having an account meant they could not deliver some of their training courses and they were also unable to apply for two grants.

Barclays Bank said: “It is extremely important that the mandates are kept up to date, particularly when parties no longer involved in the business activities will still hold authority to instruct the bank and authorise transactions.

“We work hard to avoid the last resort of account closure. While there was no bank error, we offered to reopen the account to allow more time for the information requested to be provided. The account was re-opened on 15 December 2023.”

The mandate was recently received on 8 February which completes the process begun in December 2022, according to the bank.

Howsley told Civil Society that the charity, which recorded an income of £150,000 last year, “works hard for what we do” and the banking issue had stopped a lot of its activity.

She said it was a “gamble on our part” to speak with the press but that the “staff and deaf community were right behind us” which really helped though it was an “emotional and psychological stress”.

Howsley said that every day she receives two or three messages from charities who have also had issues with banking closures.

UK charity regulators recently called on banks to improve their “substandard” services for charities, some of which are having their accounts closed or suspended suddenly and are experiencing “poor customer service and administrative delays”. 

A Charity Commission spokesperson said: “There are widespread problems in the way banks engage with their charity customers and we continue to hear from charities dealing with the fallout of these issues.

“Charities provide vital support to people across the country and urgently need to receive better service from their banks. This is why we continue to press this matter and continue to engage with the Financial Conduct Authority, high-street banks, UK Finance and the wider sector.”

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