Cohen, chairman of the Commission on Unclaimed Assets, faced questioning by an irate George Mudie, Labour MP for Leeds East, at a Treasury Select Committee hearing to examine the distribution of the dormant funds.
"Giving £330m to third sector organisations is yet another filter between the money and my constituents," Mudie told the hearing.
"The Government is putting money into the third sector, where nice middle class people are getting jobs. The people in my constituency are not getting jobs. With the amount of money that Sir Ronald is talking about, we could skill people and get them into mainstream jobs."
But Andrew Love, a fellow committee member and Labour MP for Edmonton, said: "It's not only middle class people who are working in the sector."
Cohen said the bank would lever extra money. "Our expectation is that we can get three or four times the amount from the private sector that we would get from unclaimed assets," he said.
Ed Mayo, chief executive of the National Consumer Council and an unclaimed assets commissioner, argued that the bank would be a vital way for charities to move away from the "endemic insecurity" of grant culture.
The future of the proposed bank is unclear after a Treasury report published last month said dormant money should be distributed by the Big Lottery Fund.