New 'Payment Services Regulations'?

Milarky

From 1st November new rules apply to bank accounts. In particular I've noticed that closure by the bank of your account will either be upon 60 days notice (not 30 as with the banking code) or where no notice is given the reasons have to be 'substantive' and not simply of the 'we think you smell' variety.

Has anyone got a good source of information for these changes? (I've only just started looking at the bumf coming through the post. Can we get ourselves better informed please?

(Thanks in advance)

[ 20-10-2009: This is now the subject of an MSE news item and discussion ]

noh

Milarky wrote: »

From 1st November new rules apply to bank accounts. In particular I've noticed that closure by the bank of your account will either be upon 60 days notice (not 30 as with the banking code) or where no notice is given the reasons have to be 'substantive' and not simply of the 'we think you smell' variety.

Has anyone got a good source of information for these changes? (I've only just started looking at the bumf coming through the post. Can we get ourselves better informed please?

(Thanks in advance)

http://www.opsi.gov.uk/si/si2009/uksi_20090209_en_1

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:319:0001:01:EN:HTML

opinions4u

I am told that where interest rates are reduced by more the BofE rate goes down that they also need to give 60 days notice!

I am yet to read in any depth the numerous T&C booklets that my overburdened postman has shoved through my letterbox in the last few weeks.

fischer79

Any changes to terms and conditions will require 60 days notice - this includes interest rates (unless beneficial to customers) and fees. The notice will have to be personal e.g. a letter, email etc.

Milarky

See this thread

http://forums.moneysavingexpert.com/showthread.html?t=1955231

for an interesting discussion of changes to 'SEPA' (Single European Payment Area) coming in on the same date. It appears the UK banks are abusing their position again and hampering progress.

MarkyMarkD

I don't see any reason why UK banks should make Euro (foreign currency) payments at virtually no charge to customers.

But that's by the by.

Regarding the other changes, the main impact on customers is the 60 days' notice of adverse rate changes. As fischer79 points out, this is any adverse change - not any adverse change relative to BBR as opinions4u suggests.

In fact, the new requirements are less demanding than the Banking Code in this regard - PSR will allow the product rate to stay the same, whilst BBR increases by any percentage, without the customer being notified, whilst the Banking Code would have required notification in these circumstances (subject to various limits and periods of time).

The illogical part of the new requirements is the converse of this - if your (credit) bank account rate falls by 1%, when BBR falls by 2%, that is clearly to your advantage based on any common-sense understanding. But the legislation requires you to be notified. D'oh!

Milarky

MarkyMarkD wrote: »

In fact, the new requirements are less demanding than the Banking Code in this regard - PSR will allow the product rate to stay the same, whilst BBR increases by any percentage, without the customer being notified, whilst the Banking Code would have required notification in these circumstances (subject to various limits and periods of time)

Is the FSA not responsible for all banking regulation that replaces the (voluntary) Banking Code after 1 November - and may not the FSA make more stringent rules just for UK banks, provided the PSR is also applied?

jambosans

Milarky wrote: »

Is the FSA not responsible for all banking regulation that replaces the (voluntary) Banking Code after 1 November - and may not the FSA make more stringent rules just for UK banks, provided the PSR is also applied?

Yes, the Banking Code is being replaced with a mandatory code of conduct presented to consumers in the form of Moneymadeclear. Oddly enough simple resembles the likes of ConsumerDirect and MSE, and has not made it clear that there is a mandatory code behind it. Maybe I'm not digging deep enough.

I'm not sure if the Bank Code Standards Board is still going to play a role. I think the FSA are chiming in because they actually have some clout, as opposed to a current voluntary code.

MarkyMarkD

The BCSB is being wound up from 1 November as there is no Code for them to enforce.

Whilst it might seem better to have regulation by an FSA with some clout, the BCSB did actually have quite a lot of clout - it could require financial institutions to do anything it told them, and if they refused they could get kicked out of the Banking Code scheme - which would be very publicly embarrassing.

Regarding milarky's comments, the FSA handbook changes for the regulation of banking are already in place. They are incredibly vague and ineffectual, compared to the very detailed Banking Code and even more detailed Banking Code guidance for subscribers. The FSA are, presumably, going to issue some more detailed guidance - but haven't done so yet, with less than 4 weeks to go. I'm not sure what is holding them up.

jambosans

MarkyMarkD wrote: »

The BCSB is being wound up from 1 November as there is no Code for them to enforce.

Whilst it might seem better to have regulation by an FSA with some clout, the BCSB did actually have quite a lot of clout - it could require financial institutions to do anything it told them, and if they refused they could get kicked out of the Banking Code scheme - which would be very publicly embarrassing.

Thanks, from what I've read the BCSB are changing name to the Lending Standards Board, so they are shifting focus, to credit products offered by banks, building societies and credit card providers. Details can be found on Bulletin 32 on their website.

I agree, that being stricken from the Banking Code scheme was an embarrassment, however the potential fines and "name and shame" the FSA are proposing may have a greater effect.

MarkyMarkD wrote: »

Regarding milarky's comments, the FSA handbook changes for the regulation of banking are already in place. They are incredibly vague and ineffectual, compared to the very detailed Banking Code and even more detailed Banking Code guidance for subscribers. The FSA are, presumably, going to issue some more detailed guidance - but haven't done so yet, with less than 4 weeks to go. I'm not sure what is holding them up.

Again I agree, the FSA taking over the job of the BCSB can only be effective if the underlying code is as detailed as the code it replaces. Like you've said, we will need to see the details before we can judge how effective it will be. Out of interest, have they not released anything? I've checked their website, Moneymadeclear, and BCSB, and none seem to point to the fine detail.