Banks urged to help out excluded

[Legal Beagles]

Banks are urged to offer their services to the millions of people who are excluded from using them.

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[enaid]

Re: Banks urged to help out excluded

Banks urged to help out excluded


The campaign says millions of people are unable to access mainstream credit


Banks have been urged to offer their services to millions of people who are excluded from using them. The Better Banking Campaign - a body of charities and local groups - said up to seven million people could not access loans, overdrafts and credit cards.
The campaign says many are forced to take out payday or home credit loans, which usually offer small sums with high interest rates.
Treasury figures show 1.75m people do not have a basic bank account.
Steve Wyler, spokesman for the campaign, said it was "deplorable" that financial institutions, many of which had been "propped up" by the taxpayer, were not supporting the people and businesses most in need.
"Most people believe access to bank accounts and affordable credit are basic rights, so we want to see this as a priority for all the political parties," he said.
'Sky-high interest'
Having no bank account, no credit history or no penalty payment charges are among the reasons why millions of people are unable to access mainstream credit, said the campaign.
Alternative credit comes from payday lenders and home credit companies, or worse, from illegal loan sharks.
Payday loans are offers of relatively small amounts on credit to "tide you over to the next wage packet".
The Better Banking Campaign said the "sky-high" interest on some loans can be up to 2,500% a year.
It is calling for financial institutions to be given incentives and obligations to encourage them to offer services to people who are currently excluded. It also wants a legal cap imposed on unfair interest rates.
It says financial institutions should disclose where their money comes from and where it is invested, with the data broken down by demographic group.
A recent survey of 1,000 people commissioned by the group suggested 70% of people thought having access to mainstream financial services should be a basic right

[Amethyst]

Re: Banks urged to help out excluded

No No No No No No !! to trying to sell unwanted financial burdens to low income familys


The Better Banking Campaign, hosted by ACEVO, is led by a coalition of third sector organisations:
ACEVO, Urban Forum, Development Trust Association, Fair Finance, the Centre for Responsible Credit, CCLA, and the CDFA.


Better Banking are calling for the following legislative changes:

1. To gain a clear idea of who is financially excluded,and direct government spending more appropriately, we need finnacil institutions to fully disclose who they lend to;
2. We need a cap on credit interest rates to stop the averse affects of non-mainstram lending to those who can’t access credit through mainstraem routes,: 180% apr is average for Home Credit lenders, and over 1,000% apr for pay day lenders
3. Incentives for banks to lend to those communities and orgaisations who warrant it, to bring them into the finnacial mainstram in the first place..
4. Obligations on financial institutions such as the introduction of a legal cap on credit interest rates. As the largest Home Credit lender -Provident Financial- charges £82 for every £100 lent, enforcing lower interest rates would have a dramatic impact on helping borrowers escape from a cycle of debt.
5. Incentives for financial institutions (via e.g.a CRA: see attached document) to show that they are engaging with those who are unfairly denied access to credit and financial services. This would decrease the number of financially excluded people/organisations.

I saw somewhere yesterday a call for payday loans to be restricted to 42% which is good - not sure who that was tho.

[enaid]

Re: Banks urged to help out excluded

I agree Ame the less people the banks can milk the better