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 is designed to provide customers with a secure place to keep their cash, separate from the bank's assets, with immediate access.

Description

The Safety Deposit Current Accounts Bill requires banks and building societies to offer accounts where money is held solely in cash, separately from the institution's assets, and is fully owned by the customer. These accounts cannot be restricted to specific customer groups or have limitations on deposit amounts or durations. The bank can charge reasonable fees, subject to arbitration by the Financial Ombudsman Service if disputed. The Financial Services Authority (FSA) is responsible for enforcing the law, conducting annual audits, and imposing financial penalties for non-compliance. Customers can appeal FSA penalties to the Financial Services and Markets Tribunal. Public funds cannot guarantee or insure any accounts except these safety deposit accounts. The bill applies to England and Wales only and will come into effect three months after passage.

Government Spending

The bill does not directly specify government spending. However, the FSA's enforcement role may require additional resources for auditing and penalty administration. The cost of potential payouts due to FSA liability is undefined.

Groups Affected

• Banks and Building Societies: Required to offer new accounts, comply with regulations, and potentially face penalties for non-compliance. They may incur administrative costs.
• Customers: Benefit from a new, secure account option for storing cash, but may face fees.
• Financial Services Authority (FSA): Responsible for enforcing the bill, auditing compliance, and potentially paying compensation to customers if banks fail to comply.
• Financial Ombudsman Service: Acts as arbitrator for fee disputes.
• Financial Services and Markets Tribunal: Hears appeals against FSA decisions.

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