MSE News: Budget 'to ensure bank accounts for all'

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Former_MSE_Guy
Former_MSE_Guy Posts: 1,650 Forumite
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edited 23 March 2010 at 11:34AM in Budgeting & bank accounts
This is the discussion thread for the following MSE News Story:

"Banks are expected to be forced to offer all customers a basic current account at the very least in Wednesday's Budget ..."
Read the full story:


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  • pmduk
    pmduk Posts: 10,655 Forumite
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    About time too, but, as usual, the devil will be in the detail. What will count as a basic account? and will it ever be enforced? The FSA has shown itself to be toothless when enforcing banking standards so far.
  • davidgmmafan
    davidgmmafan Posts: 1,459 Forumite
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    "The FSA has shown itself to be toothless when enforcing banking standards so far."

    I lol'd at this one, banking standards? What are they?

    Seriously though if this is going to be effective AT ALL basic accounts need to be what people think they are ie unable to incur an overdraft. Things are FINALLY moving this way but IMO it is a scandal that this wasn't done at the outset.

    It is just possible that at least some of the unbanked are so because they don't want even the possibility of incurring vast charges. Can't say I blame them.
    Mixed Martial Arts is the greatest sport known to mankind and anyone who says it is 'a bar room brawl' has never trained in it and has no idea what they are talking about.
  • Old_Wrinkly
    Old_Wrinkly Posts: 5,182 Forumite
    edited 23 March 2010 at 5:24PM
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    Martin Lewis, MoneySavingExpert.com founder, says: "Political sources have confirmed to me government plans for a universal service obligation. However, that'll require legislation, and with an election due, that means 'plans' is the operative word.
    "This is long overdue. While banks have been offering basic bank accounts for a long time, their application process indicates they don't really want to offer them.
    "Go into some branches, and say you've a poor credit score, and you'll often just be given a normal application – rejection ensues and instead of saying 'try applying for a basic account' you're allowed to walk out unbanked.

    "Banks can't have it both ways. Basic bank accounts were brought in as a sop to offset political pressure for banking for all. But if banks are promising current accounts for all they need to deliver – hopefully tomorrow will be a step forward."

    Banking partnership

    The British Bankers' Association says in a statement: "Everybody can have a bank account if they want one, unless, and this is rare, the law says they can't.... "
    Why would it require 'legislation'? As the rest of the extract indicates, banks are currently providing them, even though they don't really want to and the BBA indicates that should happen unless the law forbids it. So something must currently be forcing the banks to do something they don't want to do. Is it part of the Banking Code? And if that isn't quite as tight a wording as required, can't it be easily tweaked?

    As davidgmmafan implies, there are people who want a non-overdraft bank account with debit card and bill-paying facilities. That ought not to be a problem for the banks, since all outgoings have to be covered by monies held in the account. Not everyone wants to run-up overdrafts (if that is what Martin is implying should be available). I'm not sure I would see that as a 'step forward'.
    Don't most of the 'unbanked' (at least those who are prepared to deal with banks at all) simply want to be able to open a basic bank account with minimal (or preferably no) charges, without having to jump through the bankers' hoops.
  • MSE_Martin
    MSE_Martin Posts: 8,272 Money Saving Expert
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    Why would it require 'legislation'? As the rest of the extract indicates, banks are currently providing them, even though they don't really want to and the BBA indicates that should happen unless the law forbids it. So something must currently be forcing the banks to do something they don't want to do. Is it part of the Banking Code? And if that isn't quite as tight a wording as required, can't it be easily tweaked?

    As davidgmmafan implies, there are people who want a non-overdraft bank account with debit card and bill-paying facilities. That ought not to be a problem for the banks, since all outgoings have to be covered by monies held in the account. Not everyone wants to run-up overdrafts (if that is what Martin is implying should be available). I'm not sure I would see that as a 'step forward'.
    Don't most of the 'unbanked' (at least those who are prepared to deal with banks at all) simply want to be able to open a basic bank account with minimal (or preferably no) charges, without having to jump through the bankers' hoops.

    You're misreading me - the govt says it will require legislation not me - my point is the fact it will mean its a post electionpromise not a pre electionpromise so no guarantee of delivery.

    I think Basic Bank Accounts should be provided, easily accessible, and banks should not reject anyone for them (barring the lack of ID legal issue) - overdrafts are not part of this.

    That doesn't happen - this has been going on for years - nothing seems to improve the situation.

    What the solution is doesn't matter to me - whether its post office or bank based - but i'd support solving it any way. One of the biggest reasons inamtes give for reoffending is the lack of bank account ont he outside that forces them into the black market.

    The big point here is some banks have systemically dissuaded people from getting bank accounts while promising they give access to them.
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
    Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.
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  • Daddy-Spendless
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    personaly i would have prefered to see legislation that stops big businees penalising people who dont have bank accounts.
  • Old_Wrinkly
    Old_Wrinkly Posts: 5,182 Forumite
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    MSE_Martin wrote: »
    You're misreading me - the govt says it will require legislation not me - my point is the fact it will mean its a post electionpromise not a pre electionpromise so no guarantee of delivery.

    No, I'm not misreading you. I never said you were saying it (although in actual fact, the article didn't make itself clear on that point: ML says "... that'll require legislation". Sloppy wording? You could have inserted 'they say' between 'However,' and 'that'll' )
    I was simply asking the general question 'why legislation?'.
    We surely do not have to believe everything we are told.
    I think Basic Bank Accounts should be provided, easily accessible, and banks should not reject anyone for them (barring the lack of ID legal issue) - overdrafts are not part of this.
    We agree on this.
    That doesn't happen - this has been going on for years - nothing seems to improve the situation.
    Nothing? What has been tried? Bureaucratic processes? Official channels?
    What the solution is doesn't matter to me - whether its post office or bank based - but i'd support solving it any way.
    Any way?
    One of the biggest reasons inmates give for reoffending is the lack of bank account on the outside that forces them into the black market.
    And you believe that?
    The big point here is some banks have systemically dissuaded people from getting bank accounts while promising they give access to them.
    Agreed. And a stop needs to be put to that. ASAP.
  • stella2009
    stella2009 Posts: 278 Forumite
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    I don't believe any bank should be forced to offer a basic account.

    If they don't want that account in their portfolio then that should be their decision.

    It's an expense at the end of the day without them being able to recoup anything apart from taking it from the full current account customers.
  • glider3560
    glider3560 Posts: 4,115 Forumite
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    stella2009 wrote: »
    I don't believe any bank should be forced to offer a basic account.

    If they don't want that account in their portfolio then that should be their decision.

    It's an expense at the end of the day without them being able to recoup anything apart from taking it from the full current account customers.
    I agree. If the government want people to have banking facilities, then they should offer this themselves. They already have the means to do this (Post Office and National Savings Bank). I believe the reason they won't do it themselves is simply because it'll cost them too much money, which they'd rather someone else paid.
  • Old_Wrinkly
    Old_Wrinkly Posts: 5,182 Forumite
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    If a bank doesn't want to be registered with the FSA, they don't have to be?
    If a bank doesn't want to be part of the FSCS, then they don't have to?
    If a bank doesn't want to be conform to the Banking Code (such as it is), then they don't have to?
    Need I go on?
  • stella2009
    stella2009 Posts: 278 Forumite
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    If a bank doesn't want to be registered with the FSA, they don't have to be?
    If a bank doesn't want to be part of the FSCS, then they don't have to?
    If a bank doesn't want to be conform to the Banking Code (such as it is), then they don't have to?
    Need I go on?

    Your point is?
This discussion has been closed.
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