Carpetbagger - Modern Use - United Kingdom

United Kingdom

For more details on this topic, see Building society#1980s and 1990s.

Carpetbagging was used as a term in Great Britain in the late 1990s during the wave of demutualizations of building societies. It indicated members of the public who joined mutual societies with the hope of making a quick profit from the conversion. Contemporarily speaking, the term carpetbagger refers to roving financial opportunists, often of modest means, who spot investment opportunities and aim to benefit from a set of circumstances to which they are not ordinarily entitled. In recent years the best opportunities for carpetbaggers have come from opening membership accounts at building societies for as little as £1, to qualify for windfalls running into thousands of pounds from the process of conversion and takeover. The influx of such transitory ‘token’ members as carpetbaggers, took advantage of these nugatory deposit criteria, often to instigate or accelerate the trend towards wholesale demutualisation.

Investors in these mutuals would receive shares in the new public companies, usually distributed at a flat rate, thus equally benefiting small and large investors, and providing a broad incentive for members to vote for conversion-advocating leadership candidates. The word was first used in this context in early 1997 by the chief executive of the Woolwich Building Society, who announced the society's conversion with rules removing the most recent new savers' entitlement to potential windfalls and stated in a media interview, "I have no qualms about disenfranchising carpetbaggers."

Between 1997 and 2002, a group of pro-demutualization supporters “Members for Conversion” operated a website, carpetbagger.com, which highlighted the best ways of opening share accounts with UK building societies, and organized demutualization resolutions. This led many building societies to implement anti-carpetbagging policies, such as not accepting new deposits from customers who lived outside the normal operating area of the society.