LibDem MP comments at OFT decision not to pursue case on bank charges

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Bruce comments on OFT decision to drop bank charges case

12.00.00am GMT Wed 23rd Dec 2009
Gordon MP Malcolm Bruce told of his frustration on learning of the Office of Fair Trading (OFT)'s decision that they would be dropping their investigation into the fairness of bank charges.
Commenting, he said -
"Bank customers will share my dismay at this announcement by the OFT which comes after a long legal battle. The feeling is that there is still plenty of mileage in this battle and this has been borne out by the Supreme Court's judgment which gave scope for further challenges to the banking practices under section 140 of the Consumer Credit Act 1974. People will be wondering why the OFT has come so far only to give up now.
"The Government and the OFT seem content to allow the banks to come up with a voluntary code of practice but with the UK's banks looking to claw back business after the scare of the credit crunch this seems highly improbable and public scepticism prevails.
"If the banks fail to adequately sort this mess themselves we will need the Government to introduce effective regulations if necessary through new legislation- if only to stop millions of people being ripped of by banks which they have had to very recently to bail out."
ENDS


Bruce comments on OFT decision to drop bank charges case (The Rt Hon Malcolm Bruce MP)

[natweststaffmember]

Re: LibDem MP comments at OFT decision not to pursue case on bank charges

Michael Meacher - Labour's Future: The banks have far too much power

The banks have far too much power

Today's news that OFT is dropping its case in the courts against the banks over their extortionate overdraft charges is a further shot in the locker for the untouchables. The banks are getting away with it yet again even though the Supreme Court, the banks having already lost twice in the lower courts, did not disagree that the charges were excessive, but merely ruled that the banks were not liable under that part of the regulations. Obviously the next step should be to continue to pursue the banks, which make a third of their profits from their unreasonably high charges on overdrafts, by taking the case against them under what the Supreme Court has decreed is the relevant and correct sections of the regulations. Pathetically feebly, the OFT has now thrown in the towel and is passing the buck to the banks themselves to make changes voluntarily, which is a sick joke, or to Government to legislate, which given their partiality and over-protectiveness towards the banks is inconceivable. But what is really bad about this latest decision is that it further reinforces the reality that the banks are now out of control.

The prerogatives that have been granted to the banks over the last two years, and continue to be granted, are almost beyond belief. Their folly, greed and recklessness in letting the sub-prime and securitisation fiascos unfold before their eyes has never been punished. They were not nationalised at the outset, though that would have been the obvious, better and cheaper remedy, because the banks lobbied hard to avoid it and New Labour has an ideological aversion to public ownership. A total of £860bn, no less than 60% of GDP, has been incurred at taxpayers' expense to salvage the nation from their negligence and foolhardiness, generating a budget deficit this year of £178bn which will do untold harm to millions of others but not the banks.
They were funded stricly on the basis that they would maintain lending to businesses and homeowners at a high level, but have comp;rehensively reneged on their commitment with impunity. They have lobbied against every significant reform, in particular the separation of retail from investment banking, and have got away with it because a weak government has treated them with kid gloves. They have returned with utter insouciance to business as usual, with huge unwarranted profits made from the elimination of rivals in the crash and the enormously expanded market in government bond sales, plus outsize bonuses on the back of these windfall gains. Now they are let off any penalty for grossly overcharging on overdrafts.
This whole two-year episode has caught the banks in the searchlight of exposure. The political-financial nexus is at the heart of the neo-liberal State run in unison by both New Labour and the Tories, which explains its teflon status. The banks are now revealed to have a stranglehold over the governmment. Indeed not only has the State not taken over the banks, the banks have taken over the State. Rebalancing this distorted and highly damaging power structure in Britain, where the follies of one small part can threaten to bring down the entire edifice, ought to be at the heart of this coming election. But because the politics of this country is equally lop-sided, with no-one representing the half or two-thirds of the electorate who are crying out for radical reform of the bankers' excesses, the recovery of justice and democracy is still a long way off.