Mr Flowers, also a Methodist minister, was suspended by the church and the Labour party following claims that he bought and used illegal drugs including crystal meth, crack cocaine and ketamine.
Mr Flowers, who led the Co-op Bank for three years, has been accused of incompetence after the bank found a £1.5bn black hole in its finances. The bank now faces a rescue deal which will see 50 branches close, cutting almost 1000 jobs, and investors (including US hedge funds) take control of 70% of the business.
West Yorkshire Police released a statement that said Flowers has been taken to a police station where detectives will continue their enquiries.
A statement released by the bank said:
"When Paul Flowers relinquished his responsibilities in June, it was agreed, as per his contractual obligations, that his fees for the rest of his period of office would be paid. Following recent revelations, the board stopped all payments with immediate effect and no further payments will be made."
