Members of the cross-party Building Societies Group warned that a vote in favour of converting to a bank next month would rob the public of a valuable competitive restraint which serves to hold down mortgage rates.
Andrew Love MP, chairman of the group, said: "Building societies provide valuable diversity in a financial services industry increasingly dominated by the plc.
"If the Nationwide converted to bank status it is inevitable that it would act like a bank. With external shareholders to satisfy profit margins would widen, mortgage rates increase and savings rates fall. The competitive restraint would disappear."
The society's 7.9 million customers are expected to receive their voting forms next week. They will be asked to vote on the re-election of directors and proposals on future strategy.
Michael Hardern, the former butler who was defeated by a two-thirds majority in elections to the board last year, has succeeded in tabling a proposal for the society to take steps towards converting to bank status. Mr Hardern and Andrew Muir, a 32-year-old recruitment consultant from Slough, will run for election to the board.Reuse content