Changes to Basic Bank Accounts Dec 2015

TheGardener

I've just listened to an article on todays edition of BBC Radio 4's Money Box programme and heard that the 'Deregulation Bill' will force ALL banks to offer basic accounts to un-discharged BR's :shocked:. There are apparently going to be other changes too.
The programme is available on the BBC iplayer website listen from 16.00 mins to 20.00

fermi

As I understand it the Deregulation Bill will take away the excuse that banks are currently using to refuse to give basic accounts to BR, not that it will directly force them to give such account?

See section 16: http://www.publications.parliament.uk/pa/bills/lbill/2014-2015/0058/lbill_2014-20150058_en_13.htm#sch6-pt5

TheGardener

I may have misunderstood whether it said forced - but the chap being interviewed said he understood all banks would offer basic accounts and Paul Smith specifically mentions BR's in the interview.

fermi

Yes, he mentioned it, and said it was the Deregulation Bill that would address the issue where current BR's are not being given accounts, and that once enacted the new agreement with the banks would be able guarantee BRs accounts.

i.e the Deregulation Bills changes the bit of law about the OR recovering monies from them that is scaring off most banks from giving accounts at the moment.

The banks will then feel free - and be obliged - to give BRs accounts under the scheme without that legal "fear".

Basically...

Deregulation Bill removes the perceived legal barrier.

New basic bank account scheme then obliges them to offer the accounts.

alastairq

Does the above explain why Barclays remove internet access whilst Undischarged?

TheGardener

alastairq wrote: »

Does the above explain why Barclays remove internet access whilst Undischarged?

I have always believed that the internet thing was a way for Barclays to limit the amount of BR's who came to them and I also believe that the co-op stopped accepting undischarged BRs as a sort of protest that they were getting "more than their fair share" (I believe I read that quote somewhere)
Once the market is opened up - and to be frank, I don't expect a rush to provide basic accounts for BR's after the bill is enacted - some of the punitive measures may disappear.
However, I was also aware that the interviewee on the radio programme talked about 'eligibility criteria' so call me a cynic but...I don't believe we are about to see a rosy glow around free banking quite yet...

:xmastree:

fermi

Probably not. I imagine there will be a few ifs and buts thrown in the way yet before it shakes down.

Plus the banks have until December 2015 to bring this all in, likely not going to happen in a hurry.