Julian writes to FCA urging better protection for village banking services
February 2, 2024
Julian joined 56 other Members of Parliament in penning a letter to the Chief Executive of the Financial Conduct Authority (FCA), Nikhil Rathi, urging him to make changes to the rules surrounding banking hubs in the hope to unlock more for places in and around York.
Ensuring the continued access to cash remains a priority for Julian, who recognises that even as we move towards a more digital age, people still heavily rely on the use of physical cash. The groups that tend to rely on cash the most are often the most vulnerable in society, including older members of society who are more likely to be digitally disenfranchised, those who rely on carers, or low-income households who use physical cash as a budgeting mechanism. Julian has repeatedly raised these concerns over the last two years with Minister for Women and Equalities, The Rt Hon Kemi Badenoch MP and the former Economic Secretary to the Treasury, Andrew Griffith MP, in both the House of Commons Chamber and in meetings.
Since the passage of the Financial Services and Markets Act (2023), the FCA have become the regulator for LINK, the body responsible for assessing a community’s access to cash needs. LINK can recommend a banking hub or a similar scheme for a particular area. However, current FCA rules mean LINK are unable to recommend a banking hub until the last bank in town closes, subject to certain exceptions, risking a community’s access to cash.
Currently, the FCA are consulting on the new required changes to the rules under the Financial Services and Markets Act (2023), one of which is the changing of the “last bank in town” rule to a rule where LINK can intervene when the second-to-last bank in town closes instead.
Julian, along with a cross-party group of Members of parliament felt compelled to urge the FCA in their letter to go a step further. The group of 57 Members of parliament from eight different parties were unified in their calling for FCA “to grant LINK the ability to operate on a case-by-case basis” and argue that when “the direction of travel is clear… LINK should be able to recommend a banking hub” while “a few branches remain.”
Julian and his Parliamentary colleagues argue that such a move would enable staff to be moved over more seamlessly into a banking hub and therefore and “ensure that a community is not plunged into a limbo period” where they lose their access to cash.
The consultation run by the FCA closes on 8 February but is primarily focused on businesses and banks.
Commenting, Julian Sturdy MP stated
“I strongly believe that as we move towards a more cashless society, we cannot forget those who still rely heavily on physical cash and therefore we must take the necessary steps to protect and ensure that people can access their cash readily.
“I was pleased to join colleagues from all across the House of Commons in writing to the Chief Executive of the Financial Conduct Authority (FCA) urging them to go a step furthering in protecting access to cash on our high street through banking hubs.
“I ask, why wait until there is only one bank left in a town before action is taken. We need to ensure that we have banking hubs available so everyone can access their cash when they want to. The ask we make of the FCA is not contentious, it’s a pragmatic and deliverable goal which offers certainty to the public that they will be able to access their hard earnt money”.
