Overview

This bill mandates that all banks and building societies in England and Wales offer a new type of account: the "safety deposit current account." This account guarantees that customer deposits are held securely as cash, separate from the bank's assets, and are immediately available for withdrawal.

Description

Account Requirements

The bill defines a safety deposit current account as one where the customer holds full legal and equitable title to the deposited money, which must be kept as cash and separate from the bank's other assets. Banks cannot restrict access to these accounts or limit deposit amounts or durations. Withdrawals must be processed within 24 working hours, with clear written procedures in place.

Fees

Banks can charge reasonable fees, but complaints about fees are arbitrated by the Financial Ombudsman Service, considering factors like circumstances, payment methods, services provided, and bank costs.

Enforcement

The Financial Services Authority (FSA) enforces compliance, performing annual inspections and imposing financial penalties for non-compliance. Banks can appeal penalties to the Financial Services and Markets Tribunal.

Guarantees and Insurance

The FSA is liable to customers for any breaches of its duties under this bill. Public funds cannot be used to guarantee or insure any bank account other than a safety deposit current account.

Definitions

The bill defines "bank" and "building society," and clarifies that credit unions and friendly societies are excluded.

Government Spending

The bill doesn't directly specify government spending, but the enforcement responsibilities of the FSA might lead to increased operational costs for the regulator.

Groups Affected

• Banks and Building Societies: Required to offer safety deposit accounts, potentially incurring increased administrative and compliance costs.
• Customers: Potentially benefit from increased security and immediate access to their deposits but may face new fees.
• Financial Services Authority (FSA): Responsible for enforcing the bill's provisions and will likely need to increase their oversight.
• Financial Ombudsman Service: Will handle disputes concerning the reasonableness of fees charged for the accounts.

Powered by nyModel