Building Societies Association
The Government this week set out its plans for the expanded role of the Post Office, including the launch of a children’s savings account, a partnership with credit unions to offer affordable credit and a new first-time buyer mortgage, with a 90% loan-to-value ratio. The Post Office also announced it intends to increase its lending substantially, aiming to double the value of its mortgage book in the financial year 2010/11.
The Post Office will receive new Government funding of £180m, beyond the £1.7bn that is already invested. The Government will also consult on a new community levy to be funded by retail banks to support the link between credit unions and the Post Office.
In our response to the Department for Business, Innovation and Skills' (BIS) initial consultation, the BSA urged that any competition from the Post Office must be fair, and it should concentrate on products and services in areas in which the Post Office is better qualified than its private sector counterparts, such as the Post Office Card Account and the Saving Gateway. The Government needs to make sure these plans for the Post Office do not unfairly penalise building societies and undermine their valuable contribution.
The BSA will also be seeking to understand if building societies will be required to contribute to the ‘community banking’ levy. The BSA would be concerned if a levy was imposed on building societies.
The BSA’s response to the BIS consultation can be viewed here.
