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MSE News: Call for banks to help financially excluded

This is the discussion thread for the following MSE News Story:

"A coalition of charities and community groups today calls for increased access to financial services for millions ..."



  • LokoloLokolo Forumite
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    The Better Banking Campaign says between five million and seven million people cannot access mainstream credit, such as overdrafts, loans and credit cards, while nearly 1.8 million people do not have even a basic bank account (see the Best Bank Accounts, Cheap Loans and Balance Transfer Credit Card guides).
    and then...

    As a result, it said these people were being forced to borrow money from payday lenders and home credit companies, which often charged interest equivalent to 2,500% a year
    Maybe theres a reason the banks don't want to lend them money!!?!

    Research carried out for the group found 70% of people think having access to mainstream financial services should be a basic right, while 55% think being able to access them is essential for everyday living.
    A bank account for spending, setting DDs yes. An account with an overdraft, ability to borrow money, no.

    Agreed, everyone should have the right to have a bank account. However, some services should be a priviledge, not a right.

    "Most people believe access to bank accounts and affordable credit are basic rights, so we want to see this as a priority for all the political parties."
    Affordable credit as a right!? No. It should be a privildge imo.
  • crispy_chriscrispy_chris Forumite
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    Gotta say, I'm with Lokolo on this.
  • InactiveInactive Forumite
    14.5K Posts
    Gotta say, I'm with Lokolo on this.

    Me as well, I can see this getting a bit heated.. :D
  • glider3560glider3560 Forumite
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    Same here. If banks lend to people who can't afford to repay, but at low rates, then we all know what happens because we've just experienced it over the past few years!

    Access to basic banking facilities should be available to everyone. But overdrafts and other lending should only be available to those who can afford to repay.
  • ~Brock~~Brock~ Forumite
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    Would these be the same charities that set up and support an endless supply of schemes, helplines and departments to help these 'underpriviledged' consumers explore every possible avenue of escaping the repayment of these borrowings once they have been taken out, because all of a sudden, once the money has been borrowed, they become 'vulnerable'??

    Good couldn't make it up.
  • HazzanetHazzanet Forumite
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    Agree 100% with Lokolo here.
  • davethorpdavethorp Forumite
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    The way I read that article it seems like they are wanting banks to not exclude customers from certain facilities just because they are low down the credit ladder and can only get a basic banking account

    Personally I'd like to see banks doing away with so called basic bank accounts and offering full accounts to all. Before anyone jumps down my throat I don't mean offering things such as overdrafts, full debit cards and credit cards to all. I mean only having a standard current account and then tailoring its facilities to meet credit worthiness.

    Take natwest (who I bank with) the only differences between the basic step account I have and the full current plus account are

    • Offline Visa Debit + Cheque Guarantee (subject to status anyway, online visa debit same as step account offered to everyone else)
    • Cheque Book (extinct and I think subject to status)
    • Overdraft (subject to status)
    So why not do away with the basic account, offer the current account to all leaving elements still subject to status but importantly not excluding customers from being able to get more facilities in the future just because they only hold a basic account. There is a certain stigma attached with the basic bank accounts where the banks just overlook customers with these accounts for any form of upgraded product or credit

    Having said that I totally agree with the views of lokolo and other earlier posters that banks should not just throw credit at people. That's not what I'm saying though. I just think it should be easier for people who have made mistakes in the past to get back on the ladder and get more and better facilities if and when they are ready and offering full, but individually tailored, accounts to all would be one way of doing this
  • Credit as a right? Its this kind of belief that causes so many problems in the 1st place.
  • jos004jos004 Forumite
    222 Posts
    I disagree with Lokolo here. Simply give the Post Office full banking rights, with a small subsidy from the government. To attract/steal customers from the private sector:

    * find a way of minimising bank charges.
    * scrap those stupid worthless Visa Electron/Solo cards
    * give all customers a normal debit card. when funds are insufficient in their account, the debit card will NOT work. Computer software is intelligent enough to know when somebody's a/c is empty: high street banks are well aware of this.
    * if the customer applies for a cheque book and writes out a cheque knowing there are insufficient funds in a/c they'll encounter banking charges.
    * treat customers with a bit of respect unlike high st. banks.

    I'd rather deal with a payday loan company, as opposed to grovelling to some low life bank manager for an overdraft.
  • edited 17 February 2010 at 1:49PM
    sillystudent_2sillystudent_2 Forumite
    132 Posts
    edited 17 February 2010 at 1:49PM
    Like others in this thread, agree completely with Lokolo - after all, wasn't the current mess we're in essentially caused by massive defaults of loans to subprime borrowers? I might've over-simplified it a little but the point stands - credit should be a privilege, to say it is a 'right' is ridiculous.

    However I do think basic bank accounts should be available to all. The problem arises, however, because a lot of these sub-prime borrowers will have debts (possibly ones sold on to DCAs) to a number of the high-street banks - under these circumstances isn't it understandable that these banks don't want these particular customers back? (even if the basic account doesn't involve any borrowing.)

    jos004 wrote: »
    I'd rather deal with a payday loan company, as opposed to grovelling to some low life bank manager for an overdraft.

    Really?? Even if you pay hundreds/possibly thousands more in interest? I wouldn't!! And tbh I think you'll find the payday loan people are far more likely to be "low lifes" than the bank manager who's probably well-educated/has a good university degree :)
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