BBA response to opposition parties' banking reforms

[Legal Beagles]

BBA response to opposition parties' banking reforms


20/07/2009

"Today's City reform announcements from the main opposition parties - along with the government's own White Paper last week - map out the political landscape for financial services in the UK. It is clear everyone recognises the importance of financial services to the UK economy and the need to come up with sensible and appropriate regulation to meet the challenges of a global financial market. We are pleased there is a growing understanding that monetary policy and regulation are interconnected.

"The British Bankers' Association supports change. UK banks have already made significant moves to reform how they operate and major capital reform is underway. Banks are holding far more capital than is required under international rules and are looking to how they would survive any future financial crash. We are also working with the FSA to ensure that rewards are firmly linked to long term success.
"But change needs to be properly and systematically managed. It has to be taken internationally and must be proportionate to ensure stability rather than simply chopping banks up. We need to take care we do not stifle the financial sector through an effective tax on the size of businesses as scale is important for innovation, lower costs, financial inclusion and international business. We welcome the recognition that, for the UK financial services sector to remain internationally competitive, we must keep a tight grip on what is happening both in Europe and worldwide.
“The BBA will work with all interested parties to ensure that banks are sound and have the resources to operate effectively in the best interests of customers, shareholders and the wider UK economy."
Notes to Editors:

Contact the BBA media team on 020 7216 8825/8873 for comment on specific aspects for today's proposals.


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[Amethyst]

Re: BBA response to opposition parties' banking reforms

BBA Credit Manifesto

Credit manifesto
The BBA has drafted a credit manifesto, which outlines the industry’s position. This is in response to continued interest in retail credit from various government departments, both in terms of ‘real help now’ for consumers in financial difficulty and considering the forward view of credit provision. In summary, we are calling for:
• Better supervision and enforcement.
The BBA feels strongly that the FSA should be formally acknowledged as the lead regulator for all retail banking activity including responsibility for credit for authorised firms.
• A safe and sound system.
Clear and unequivocal primary/ secondary legislation:
(i) Rigorous application of the government’s ‘Better Regulation’ principles to all new legislation and good practice guidance would ensure that any unintended legislative consequences are avoided
(ii) Legal loopholes would be closed
(iii) Existing ‘grey areas’ would be addressed (e.g. modifying agreements/ multiple agreements)
(iv) No ‘gold plating’; implementation of EU legislation that is consistent with all EU member states.
• Fairness in retail credit.
We would like to see the development of secure, agreed minimum standards for banks’ retail credit activities. As an interim step this could be through
“The Ministry of Justice has now raised its concerns that claims management companies’ practices are not always good enough. The BBA mystery shopping exercise will be passed to Ministers.” “With parts of the Banking Code going into the FSA, more credit regulation is on its way so a ‘credit manifesto’ that brings everything together is essential.”
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unconfirmed industry guidance, then through the development of a ‘credit code’, covering responsible lending/ credit assessment.
• Increased data-sharing to improve underwriting decisions.
Including: (i) income data from HMRC; (ii) all student loan portfolios; (iii) council tax arrears; (iv) utility bill arrears
• Enhanced customer responsibilities.
We are calling for customers to take personal responsibility for (i) reading documentation – and to ask if not sure; (ii) providing accurate information; (iii) undertaking self–appraisal of affordability; (iv) reviewing circumstances periodically; and (v) giving early advice of changing circumstances.
• FOS to revert to its readily accessible dispute resolution role.
Should FOS see multiple complaints on the same or similar issues, then the FSA would provide clarification in an open and consultative manner. It is increasingly apparent that BERR's focus will be on credit cards, possibly reflecting interventions made in the US market and we are working closely with BERR to better understand their thinking ahead of the next Consumer Finance Forum meeting on 18 June where BERR's proposals could well be presented for discussion.