Student Finance Overview
If you buy Fairtrade goods, believe in human rights, or are concerned about climate change -
- put your money where your mouth is and open an ethical bank account too.
Financial institutions make all sorts of offers to get students through their doors, from discounts to vouchers to bags of freebies. But these short-term gestures can mask long-term issues.
How would you feel if your money was being used to prop up oppressive regimes, test cosmetics on animals or damage the environment?
What are the issues?
Before you open a new student bank account, or if you want to find out about your current bank’s green and ethical credentials, you should consider the following:
Lending
Banks don't just lend money to current account-holding customers, they also lend to large corporations, public institutions and even governments. Would you approve if your bank was lending money to a company with a poor track record on human rights or one manufacturing arms for use in war zones?
Climate Change and Environment
Financial institutions have an impact in these areas, not just in terms of who they lend to or invest in, but how they run their own operations. It is important to find out what your bank or insurance provider is doing to improve its environmental performance as a business: have they pledged to go carbon neutral for example? Or do they offer any green products to their customers?
Equal Opportunities
A lot of people believe that equal opportunity in the work place is now the norm, but there is still a massive pay gap between men and women doing the same jobs across most industries, including finance. Also the number of women in high level positions is still significantly lower. Not only that but some companies’ equal opportunities policies don’t take other key issues like sexuality and disability into consideration.
Financial Exclusion
There are an estimated two million adults in the UK without even the most basic bank account. Is your bank doing anything to address this situation?
For more details see our Financial Exclusion section.
Responsible Credit
Does your bank, credit card provider or insurance company take care to appropriately target and market its products? Does it offer assistance to customers in financial difficulty? Some credit card providers may not treat their customers responsibly – issuing cards to people who’ll struggle to make their repayments and not offering help to those who do fall behind.
What are the ethical options?
There are a few banks, building societies and insurance companies with well-recognised green and ethical credentials. The examples listed below for banking and saving also scored the highest marks on ethical lending in our research:
Banking
- The Co-operative Bank: this institution provides student banking, insurance and credit cards facilities and has an ethical lending policy that extends across all its business operations.
- Smile: this internet arm of the Co-operative Bank and also offers student accounts.
Saving
- Triodos: this bank offers green and ethical savings accounts. Its commercial lending is primary to green businesses.
- Ecology: this mutual building society offers a range of green savings accounts and mortgage options and its commercial lending is mainly to small, green businesses.
Insurance
- Co-operative Insurance
Insurance type: home, motor, life and health
This company offers a wide range of insurance products and has an extensive ethical engagement policy governing who it will provide cover to. - Climate Sure
Insurance type: travel
Climate Sure calculates the CO2 produced by flying overseas and pays for it to be 'offset' by funding sustainable energy projects. - Green Insurance Company
Insurance type: motor
This provider aims to offset your car's carbon emissions and offers discounts on greener cars/lower mileage. - Naturesave
Insurance types: home, travel, personal accident and illness insurance
This company puts 10% of its personal insurance premiums in a fund (Naturesave Trust) to benefit environmental and conservation projects. It also offers a free environmental performance review for commercial clients and aims to use suppliers that support sustainable business practices.
Credit Cards
Before signing up to a card you should check out the ethical credentials of its provider. Visit our credit card section for more information.
Your next steps
See our Next Steps Guide - Student Finance for information on finding the best green and ethical service provider for you, how to switch accounts and how contact your bank or insurance company about their policies.
Student Finance Search
| Please click on any of the financial institutions below to find out more |  |
 |
 |
|||
|---|---|---|---|---|---|---|
 Financial Institutions |
Criteria | |||||
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
First Trust Bank
Green/Ethical Products
- Basic Bank Account (available to customers in Northern Ireland only)
Ethical Lending or Insurance
There is no specific reference to who the bank will and will not lend to in their Code of Business Ethics.
However, parent company AIB applies ethical screening criteria in investments and project finance including, but not necessarily restricted to, areas such as tobacco manufacturing, pornography, gambling, armaments, oppressive regimes, human rights abuses and environmental issues.
In 2007 AIB Corporate Banking launched a €350m sustainable energy fund to support companies operating in the energy sector.
Responsible Lending
1. Credit Lending
First Trust offers a 75% standard LTV (loan-to-value) rate to mortgage borrowers, rising to 90% for first time buyers. This compares favourably with the FSA’s Turner Review suggestion that LTV rates be set at 90%, i.e. that borrowers should have at least a 10% deposit for a mortgage.
The bank has set its LTI (loan-to-income) rates at 3 times gross income for single applicants, against comparing favourably with the Review’s analysis which suggests lending to 3.5 times of income for single borrowers.
The bank automatically conducts searches with a credit reference agency for all loan applicants through its New Applications Processing System (NAPS).
It explicitly states that it does not solicit customers with unrequested increases in credit limits (i.e. on credit cards or overdrafts).
2. Debt Warning
The bank offers the following generic warning to mortgage and secured loan customers: ‘Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.’ Warnings about unsecured credit were found in relation to credit cards only.
First Trust uses a ‘Borrowing Wizard’ to calculate monthly loan repayments. However, it is just a calculation, with no related warning system and it is not clearly related to debt management. It does not refer customers to the FSA Debt Test or an equivalent. This facility is designed aims to help customers find out whether you have, or are likely to have, problems with borrowing. It also has tips on what to do if customers find themselves in difficulty.
3. Debt Management and Advice
First Trust recommends that customers experiencing financial difficulties talk to them at the earliest opportunity and provides a list of possible circumstances personal and business customers may find themselves in.
The bank states: ‘With your [the customer’s] co-operation we will help develop a plan to deal with your financial difficulties, consistent with your interests and ours and we will tell you in writing what we have agreed. We will also liaise with debt counselling organisations such as Citizens Advice Bureau, business support organisations or your professional advisers where you give us permission.’
It is not specified whether this applies to customers with secured credit (mortgages) or just those with unsecured credit.
Furthermore, no information was available regarding possible payment breaks/holidays for either secured or unsecured loans, though the bank stated in its response to our research that if customers fall into arrears options explored with them include restructuring, interest-only payments or a moratorium.
No evidence was found that the bank offers re-housing advice to customers facing possible repossession or if it liaises with organisations such as Shelter and the Citizens Advice Bureau.
Financial Exclusion
The bank offers a basic account to customers in Northern Ireland.
The First Trust Bank website complies with WA1 accessibility standards (level 2AA) as provided by the World Wide Web Consortium. This standard ensures that website content can be navigated and read by everyone, regardless of their location, experience or the type of computer technology, and impairment such as blindness, partial sight, deafness, dyslexia, tremors or lack of dexterity in hands and fingers.
Environment
First Trust’s environment policy and commitments covers the key areas of energy efficiency and waste management. It also shows commitment to continued improvement of its environmental performance.
Carbon Neutral
No pledge was found to make business operations carbon neutral.
Equal Opportunities
The bank’s equal opportunities statement addresses the key areas: race, gender, sexuality and disability.
Women on the Board
The parent company reports 14% for 2007.
Voluntary Standards & Initiatives
Not by itself, but the parent company, Allied Irish Bank, is a signatory of:
Charitable Giving
First Trust Bank does not indicate any aggregate amount, but the parent company AIB reports at 31 December 2007 that First Trust Bank’s staff charity programme raised £145,000 in the last 18 months for the Staff Charity Hospice Care at Home.
One of the main recipients of charitable donations from the parent company is the ‘Better Ireland’ programme which donated some €2m to children’s groups in 2008.
First Trust Bank
- Current Accounts
- Savings
- Investments
- Credit Cards
- Loans
- Mortgages
- Insurance (Home, Mortgage Protection)
- Student Current Account
- Student Credit Card
