Building Societies Association
Feature
BSA responds to FSA consultation on regulating retail banking conduct of business
|
Date:
25 Feb 2009
|
Print page | Email |
Responding to the FSA’s consultation on regulating retail banking conduct of business, the Association has stated its support for voluntary self-regulation through the Banking Code and is keen for this to continue in the future. If statutory regulation were to be pursued, however, we believe that ALL retail banking, including credit, should move to the FSA. It would be crucial that whatever replaced the Code was capable, in practice, of ensuring even better and more effective regulation.
The BSA believes the Banking Code has worked well and, unlike some statutory regulatory regimes, can be quickly amended to take account of emerging issues or concerns.
The BSA does not object to statutory regulation of retail banking. Indeed, it would support responsibility for regulating all retail banking, including credit, moving to the FSA, because, in principle, there is much to recommend in having a single regulator. However, this is not what is proposed in the consultation paper. Under the proposals, the FSA would be responsible only for regulating savings and current accounts (but not current account overdrafts). Responsibility for regulating credit products would technically fall under the OFT’s remit.
We are concerned that there is a danger of regulatory double jeopardy under the proposed regime and the potential loss of valuable consumer protection. This is especially the case in areas like financial difficulties, where both regulators have responsibility. There is also the anomaly whereby both regulators would have responsibility for different aspects of the same product. Under the proposals, the FSA would have regulatory responsibility for current accounts where they are in credit and the OFT would have responsibility for current accounts where they are in overdraft.
The full BSA response can be viewed via the link below -
