Can Building Societies survive?

SChitmehard

The benefit of building societies are  they are customer owned and customers can vote in elections, they are mutual. They should be encouraged as sometimes they will lend money and offer banking to the people that the banks won't. 

 These banks are often owned by a small number of people/businesses and run by a small number which make all the decisions without the input of the customers or civil society. And we have seen the result, withdrawal of banking facilities from towns, raising fees, rubbish interest rates, unethical business practice (HSBC money laundering for drugs cartels - google it). My biggest bug bear is that they have no pass books (santander is getting rid of them now) which I like as it gives me a long term history of savings, interest etc. I find the banks sending me a statement a month too much (especially if you have multiple accounts) and yearly statements too few to keep an eye on my money.

We need to encourage building societies as once they are got rid of sharp banking practice will become more common. These people that chase small interest rate benefits in banks harm us all in the long run.

Section62

SChitmehard said:

The benefit of building societies are  they are customer owned and customers can vote in elections, they are mutual.

In my view most of the building society elections are just sham democracy.  They use a 'quick vote' feature to allow members to vote in favour of all the motions, then offer a bribe incentive to encourage people to vote.  Unsurprisingly the percentage results often look like figures that Kim Jong-un would find agreeable.

I don't recall a single time I was asked to vote for board members from a list that had more candidates than there were vacancies.  If number of candidates = number of vacancies then there is no real democracy.

SChitmehard said:

These banks are often owned by a small number of people/businesses and run by a small number which make all the decisions without the input of the customers or civil society.

The banks which are listed are owned by thousands of shareholders.  If you own shares in a bank you use then you are effectively in the same position as you would be as a member of a large building society.  The real difference comes in the corporate structure and the rules that apply to how the FI raises funding to lend.

SChitmehard said:

They should be encouraged as sometimes they will lend money and offer banking to the people that the banks won't.

Equally, some banks will lend money and offer banking to people the building societies won't touch.  My parents had been long-term customers/members of one bank and one (local) building society.  When I wanted to get a mortgage the building society wouldn't even give me an appointment to discuss the options.  The bank was happy to lend to me.  It works both ways.

SChitmehard said:

These people that chase small interest rate benefits in banks harm us all in the long run.

I really don't understand what you mean by that.  MSE'ers are harming society by depositing their money with the financial providers who offer the best savings rates?  Really?

Albermarle

SChitmehard said:

These people that chase small interest rate benefits in banks harm us all in the long run.

I really don't understand what you mean by that.  MSE'ers are harming society by depositing their money with the financial providers who offer the best savings rates?  Really?

I did not understand this comment either. In fact people chasing better interest rates, do not go anywhere near the big banks !

p00hsticks

longleggedhair said:

Yesterday I visited one of the many branches of my local building society The West Bromwich, whom I’ve been a member of for decades. I walked into the lovely branch, which was empty, with three cashiers sat twiddling their thumbs. I paid into my account with my old fashioned passbook which has a reasonable rate of 1.4%.

Your experience doesn't match mine. I normally rarely have occasion to go into a physical bank or building society branch on my own account, but over the last eighteen months or so I've had to as I'm dealing with winding up an estate. Whenever I've been in to the local building society branch - to inform them of his death, to get a cheque for the funeral director, and later to close his savings accounts - it;s been busy and I've had to queue. Ditto the local branch of the Halifax that I've been going to to pay cheques into (equally busy, but less of a queue there as I can use one of their automatic tellers)

Your observations may say more about the West Bromwich in particular than  building societies in general. 

Albermarle

p00hsticks said:

longleggedhair said:

Yesterday I visited one of the many branches of my local building society The West Bromwich, whom I’ve been a member of for decades. I walked into the lovely branch, which was empty, with three cashiers sat twiddling their thumbs. I paid into my account with my old fashioned passbook which has a reasonable rate of 1.4%.

Your experience doesn't match mine. I normally rarely have occasion to go into a physical bank or building society branch on my own account, but over the last eighteen months or so I've had to as I'm dealing with winding up an estate. Whenever I've been in to the local building society branch - to inform them of his death, to get a cheque for the funeral director, and later to close his savings accounts - it;s been busy and I've had to queue. Ditto the local branch of the Halifax that I've been going to to pay cheques into (equally busy, but less of a queue there as I can use one of their automatic tellers)

Your observations may say more about the West Bromwich in particular than  building societies in general. 

My local Nationwide branch is usually reasonably busy as well, although the queue is usually only one or two people.
Probably helps that they are the only bank/BS branch left in the town, after three bank branch closures and one other building society closure locally. Unless you count the Post Office.

Bridlington1

I think the main hope for building societies is that they are usually seen as ethical. Many people I know would rather accept a slightly lower rate of interest on their savings if it meant their money was funding good causes. 

SChitmehard

Section62 said:

SChitmehard said:

These people that chase small interest rate benefits in banks harm us all in the long run.

I really don't understand what you mean by that.  MSE'ers are harming society by depositing their money with the financial providers who offer the best savings rates?  Really?

In the same way people chasing 1p lower price on a can of milk go to Tesco/Asda and benefit free market and society. This type of behaviour has led to the death of the small businesses and local shops in these communities.  This is what I meant, and this is also happening in the banking sector and will in the long term harm communities and society.

Albermarle

SChitmehard said:

Section62 said:

SChitmehard said:

These people that chase small interest rate benefits in banks harm us all in the long run.

I really don't understand what you mean by that.  MSE'ers are harming society by depositing their money with the financial providers who offer the best savings rates?  Really?

In the same way people chasing 1p lower price on a can of milk go to Tesco/Asda and benefit free market and society. This type of behaviour has led to the death of the small businesses and local shops in these communities.  This is what I meant, and this is also happening in the banking sector and will in the long term harm communities and society.

With savings providers it is the opposite. The smaller ones normally offer better rates than the bigger ones ( with an occasional exception) , so your analogy with supermarkets and corner shops is incorrect in this case.

Section62

SChitmehard said:

Section62 said:

SChitmehard said:

These people that chase small interest rate benefits in banks harm us all in the long run.

I really don't understand what you mean by that.  MSE'ers are harming society by depositing their money with the financial providers who offer the best savings rates?  Really?

In the same way people chasing 1p lower price on a can of milk go to Tesco/Asda and benefit free market and society. This type of behaviour has led to the death of the small businesses and local shops in these communities.  This is what I meant, and this is also happening in the banking sector and will in the long term harm communities and society.

Still makes no sense to me.

Trying to follow your logic, if Tesco/Asda charged 1p extra per 'can' of milk then everything in society would be good?

The death of small businesses and local shops is far more complicated than supermarkets selling products at lower prices.  Also, in many places the supermarkets (Tesco, M&S, and Sainsbury's in particular) have been opening 'local shops' in places that didn't have them before.

But coming back to savings, people chasing better savings rates isn't what is causing a decline in the number of high street bank and building society branches.  That very clearly is the take up of online banking and a reduction in people using cash.  Building society and bank branches are closing because people aren't using them in the way they were - virtually every branch closure assessment I've read has made that point.  None of them have mentioned customers seeking an extra 0.1% on their savings.

Malthusian

Section62 said:

Still makes no sense to me.

Big companies = bad.

Asda + banks = big. Therefore bad. Building societies and corner shops = small. Therefore good.

Non-mutuals don't have a monopoly on unethical behaviour, look at the Co-op Bank, or Nationwide's £473 million bill for PPI. The only reason mutuals are a less attractive target for money launderers is that mutual status is a barrier to expanding overseas.