The revised Banking Code offers few new concessions to communities facing the loss of local banking provision and does little to put right the injustice inflicted on rural communities after the last review. In the matter of branch closures the independent reviewer has not been as strong in her recommendations as one now needs to be with an industry that is used to getting its own way.
As an alternative to legislation the industry needs to do better than this.

The extra 4 weeks notice of branch closure will now be given to 50-60 rural “last banks” that did not qualify under the 5 mile definition unilaterally imposed by the banks last time around and some others could benefit from the change to road mileage from “crow flies”. However at least 300 rural locations with only one bank left will be subject to only the standard 8 weeks. The new 1 mile qualifier for an urban “last bank” helps only a minority of urban situations and the pledges made by banks, outside the Code, to keep “last banks” open for “the foreseeable future” never applied to urban areas and, unless renewed, could soon become time expired for rural sites.

Derek French, Director of The Campaign for Community Banking Services said: “The continued absence from the Code of any requirement for consultation on closure proposals, let alone consideration of the social and economic impact, means little protection for customers and lets the banks get away with minor irritants to the closure path rather than anything likely to make them rethink an individual decision or a closure strategy.”

The additional trigger for notice, a reduction in opening hours by 50%, is next to useless as the banks generally reduce hours, as a prelude to closure, in stages of less than 50% and will certainly do so in the future.

Two improvements that are welcomed are the obligation to be more location specific when advising customers of alternative facilities to the closing branch and the requirement to make small business customers aware of their right to apply to use the counter of a remaining competitor bank under existing inter bank agency agreements. However the banks’ control over the price charged remains a disincentive and there needs to be an obligation to raise awareness of this useful facility more widely than just when closing a branch: on this the banks have arbitrarily avoided the reviewer’s recommendation as they did the efforts of the Competition Commission and OFT last year to achieve a higher profile for such arrangements on non discriminatory terms.

Contact
Derek French
Hon Director
Tel : 01582 764760

www.communitybanking.org.uk