Safety Deposits Current Accounts Bill - Second Reading

The Private Member’s Bill introduced by the Earl Caithness (Con) received its Second Reading on 25 April.  The Bill “to make provision for the introduction of a mandatory requirement for banks and building societies to offer safety deposit current accounts to allow money to be stored for safe-keeping; and for connected purposes”, proposes banks and building societies offer a choice between “a present at-risk current account and a safety deposit current account in which the funds deposited remain the property of the depositor and which guarantees to depositors both secure storage and secure distribution”.  It is envisaged that a reasonable charge to the customer be made for storage and distribution.

Lord Davies of Oldham (Lab) strongly opposed the Bill saying “this Bill looks modest in intent, but, if implemented, its impact would be explosive… that is a massive inhibition on the centuries-old role of banks and the long period of time in which building societies have operated. If there were a high take-up of the proposed safety deposit current accounts by consumers, there would certainly be a significant impact on the cost of borrowing and therefore on the real economy.”

The Bill now proceeds to Committee of the Whole House, but was not successful in the Private Members’ Bill Ballot and does not appear to have Government support, so is unlikely to reach the Statue books.

The full debate on the Bill can be viewed here