New research by the Campaign for
Community Banking Services has revealed 1500 banks in urban and
rural communities are threatened with closure starting as early
as next year. Those most at risk are around 300 last banks in small
towns and villages.
The campaign, a coalition of 26 organisations including
Help the Aged calls for an ongoing debate involving the banking
industry, consumer bodies and government before it is too late.
Derek French, the Campaign’s Hon Director, said: ‘Under
the guise of extending the required notice of branch closure in
sole bank communities, the banks have sneaked into the Banking
Code a definition which could have a devastating effect on many
rural areas. Essentially, this definition means that 300 rural
branches in England and Wales that are less than a five miles
radius from another bank, and 100 in Scotland, will have had their
existing protection from closure eradicated.’
‘Banks have no obligation to consult on closures and with
the temporary pause in closure programmes breaking up, the 1000
communities with just one bank and 500 with only two banks, should
now feel nervous.’
The research was commissioned in May following a new bout of
anti-consumer actions and past disgraceful behavior by the main
High Street banks in relation to the future of their branch networks.
It revealed the four main High Street banks in England and Wales
and three in Scotland are essential to the provision of banking
services to vulnerable communities in more or less equal parts
- diminishing the banks’ arguments against co-operating
to find a solution.
Closing a branch in a small community reduces banking convenience
and can cripple local business. If people are forced to bank outside
the locality, they are likely to spend elsewhere too. The extent
of these local monopolies and duopolies restricts choice of banking
provider amongst small businesses, retailers and individuals such
as the elderly and disabled customers who may not have access
to alternative options.
Mervyn Kohler, Head of Public Affairs at Help the Aged comments:
‘It is the most vulnerable in society who suffer when local
banks, shops and post offices close. As pension and benefit payments
are now being paid directly to bank and post office accounts it
is vital that the banks remain in small towns and rural communities.
Without this lifeline, many older people, particularly those with
mobility problems will struggle to buy the every day essentials
such as the food and clothing that they need to live’.
Furthermore, the research criticizes the banks’ reluctance
to engage in serious consideration and trials of shared banking
options, which could so easily provide the answer to the future
of banking in small communities. The recent widely criticized
“set up to fail” shared banking pilot by the four
main High Street banks would have benefited only 50 communities
even if the banks had judged it a success.
The banks have also been condemned in the research for seriously
understating, in a mandatory competition report to the OFT, the
potential demand from small businesses for use of more convenient
competing banks’ counters for pay-ins and withdrawals. The
banks’ denial of the case for improving awareness and operation
of the service was based on an assumption of around 240 sole bank
sites in England and Wales where the research has identified over
800.
ENDS…
NOTES FOR EDITORS
- Around 5000 bank branches have closed since 1990 leaving
nearly 1000 communities bankless.
- Campaign for Community Banking Services is a coalition of
26 national organisations concerned about bank branch closures.
Organisations involved and other details can be found at website:
www.communitybanking.org.uk
- The report “Bank Branch Relative Proximity” and
branch lists by country, region and < + > 5 miles are
temporarily available on the CCBS website. Some case studies
are available on request.
- CCBS responses to the reports for the OFT on branch access
and for the BBA on a pilot shared banking service are available
on the CCBS website.
SCOTLAND & WALES
A more benevolent attitude to branch closures by the Scottish
banks historically is highlighted but with a warning that this
could change following the recent mergers with larger English
banks. In rural Wales a disproportionate reliance on HSBC is revealed
at a time when that bank has recommenced closures after a lengthy
interval. See above re detail availability
