Asked by: Lord Sharkey (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government, further to the Written Answer by Lord O’Neill of Gatley on 12 July (HL883), which Muslim organisations affected by the withdrawal of banking services they continue "to work closely with…to better understand their experiences and encourage dialogue with the banking sector"; how that working closely manifests itself; and what is their assessment of the outcomes of that close working.
Answered by Lord O'Neill of Gatley
Ministers and officials have received representations from a wide range of organisations and individuals who have been affected by account closure. Officials have discussed the issue of access to banking with individual Muslim organisations as well as representative groups such as the Muslim Charities Forum and Bond.
The Government remains concerned about the growth of de-risking and the implications it has for NGOs, economic growth, financial inclusion and financial stability. We recognise that this trend remains a global problem, and have taken concrete steps to address this. We put the issue on the G20 agenda in 2015 and, closer to home, we have encouraged the banking sector to produce new guidance to help those affected by de-risking to open a UK bank account, by setting out what information banks will require in order to comply with relevant regulation and the questions they will need to ask. We have encouraged those affected to consider using their bank’s formal complaint service or, if they believe they have been treated unfairly or unreasonably, to consider referring the case to the Financial Ombudsman Service. We have also encouraged those affected to use the Business Account Finder provided by MoneyFacts to locate an alternative account provider.
In order to continue dialogue with the NGO community on these matters, a Government-NGO Working Group will shortly be convened to explore concerns and identify solutions on the impact of regulation and banking practices on NGO operations in fragile states. The group will examine the specific challenges faced in getting aid into hard-to-reach communities.
Asked by: Lord Sharkey (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government, further to the Written Answer by Lord O’Neill of Gatley on 12 July (HL883), what steps they are taking with regard to the withdrawal of banking services to encourage banks to take a risk-based approach and to ensure that the measures they take are effective and proportionate; and what assessment they have made of the extent to which that encouragement has been effective.
Answered by Lord O'Neill of Gatley
The government engages regularly with the banking industry and those affected by de-risking in order to facilitate communication. The aim of this is to improve banks’ understanding of how affected sectors work and to improve affected sectors’ understanding of how they can best meet the banks’ requirements for providing services. This process has led to the British Bankers’ Association developing tailored ‘access to banking’ guidance for affected sectors.
The government continues to work with the Financial Conduct Authority (FCA), who recently published research into the withdrawal of banking services. The FCA are also working with the banking industry to lessen the damaging effects of de-risking without constraining banks’ commercial freedom.
Internationally, the UK has been instrumental in making de-risking a priority for the G20 and the Financial Stability Board. The government is working with the Bank of England and the FCA on internationally agreed guidance to financial institutions that will clarify regulatory expectations, making their responsibilities clearer to allow a more risk-based approach and better appraisal of risks.
Asked by: Lord Sharkey (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government what representations they have received about the summary and non-appealable closure by UK-based banks of accounts belonging to Muslims or Muslim organisations; from whom they received those representations, if any; and what response they made.
Answered by Lord O'Neill of Gatley
The withdrawal of banking services from certain sectors, including NGOs and community-based organisations, is unfortunately one instance of a global problem of de-risking affecting many countries and a number of sectors. The Government is concerned about the growth of this trend and the implications it has for NGOs, economic growth, financial inclusion and financial stability. That is why the Government continues to work closely with those affected in the UK to better understand their experiences and encourage dialogue with the banking sector. The Government also encourages banks to take a risk-based approach in their activities, to ensure that the measures they take are effective and proportionate, and that they mitigate the risks they face.
Treasury Ministers and officials receive representations and have meetings with a wide variety of organisations and individuals as part of the process of policy development and delivery.
Details of ministerial and permanent secretary meetings with external organisations on departmental business are published on a quarterly basis and are available on the gov.uk website.
Asked by: Lord Sharkey (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government what assessment they have made of the proposal not to publish the Financial Conduct Authority’s report on banking culture outlined in its Business Plan 2015–16; to whom they have communicated that assessment; and what response they have received.
Answered by Lord O'Neill of Gatley
No Treasury Minister or official had any discussions with the FCA before the FCA took its decision to discontinue the review of banking culture included in its 2015-16 Business Plan.
The FCA has published (in response to the Noble Lord’s Freedom of Information request) the dates when it communicated its decision to discontinue this review to other organisations. This response is available on the FCA website.
Asked by: Lord Sharkey (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government what written assessments of the advantages and disadvantages of not publishing the Financial Conduct Authority’s report on banking culture outlined in its Business Plan 2015–16 were considered, and when; and who wrote those assessments.
Answered by Lord O'Neill of Gatley
No Treasury Minister or official had any discussions with the FCA before the FCA took its decision to discontinue the review of banking culture included in its 2015-16 Business Plan.
The FCA has published (in response to the Noble Lord’s Freedom of Information request) the dates when it communicated its decision to discontinue this review to other organisations. This response is available on the FCA website.
Asked by: Lord Sharkey (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government on what dates ministers or officials had discussions with officials at (1) the Bank of England, (2) the Prudential Regulation Authority, and (3) the Financial Conduct Authority (FCA), about not publishing the FCA’s report on banking culture outlined in its Business Plan 2015–16; and which ministers and officials were involved in each of those discussions.
Answered by Lord O'Neill of Gatley
No Treasury Minister or official had any discussions with the FCA before the FCA took its decision to discontinue the review of banking culture included in its 2015-16 Business Plan.
The FCA has published (in response to the Noble Lord’s Freedom of Information request) the dates when it communicated its decision to discontinue this review to other organisations. This response is available on the FCA website.
Asked by: Lord Sharkey (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government when they first learned that the Financial Conduct Authority was considering not publishing its report on banking culture examining “whether cultural change programmes in retail and wholesale banks are driving the right behaviour, in particular focusing on remuneration, appraisal and promotion decisions of middle management, as well as how concerns are reported and acted upon”, as outlined in its Business Plan 2015–16.
Answered by Lord O'Neill of Gatley
No Treasury Minister or official had any discussions with the FCA before the FCA took its decision to discontinue the review of banking culture included in its 2015-16 Business Plan.
The FCA has published (in response to the Noble Lord’s Freedom of Information request) the dates when it communicated its decision to discontinue this review to other organisations. This response is available on the FCA website.
Asked by: Lord Sharkey (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government what data they collect or intend to collect on the sale of contingent convertible bonds by banks regulated by the Prudential Regulation Authority.
Answered by Lord Deighton
HM Treasury does not collect any data on the sale of contingent convertible bonds by banks regulated by the Prudential Regulation Authority, and does not currently have any plans to do so.
Asked by: Lord Sharkey (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government what mechanisms are in place to ensure that (1) on first contact with potential customers, fee charging debt management companies notify of them of the existence of free debt management services, and (2) such notification is sufficient to produce an awareness of the existence of the free service.
Answered by Lord Deighton
The Financial Conduct Authority has put in place binding requirements on fee-charging debt management firms to signpost customers to free independent debt advice at the first point of contact, including when contacted following a referral from a lead generator.
The FCA is monitoring the compliance of debt management firms with
its rules on an ongoing basis via its supervision of such firms and from 1 October 2014, all debt management firms are required to submit to the full scrutiny of the FCA authorisation process which will involve a comprehensive consideration of all aspects of their compliance.
The FCA is also undertaking an in-depth thematic review of the debt management sector to assess the quality of advice, looking at whether firms are recommending appropriate debt solutions, and how incentive structures and the use of lead generators may be affecting consumers.
Asked by: Lord Sharkey (Liberal Democrat - Life peer)
Question to the HM Treasury:
To ask Her Majesty’s Government, further to the Written Answer by Lord Deighton on 11 August (HL1638), whether they, or the Financial Conduct Authority, have made an assessment of the effect on the market for debt management services of the absence of notification of the existence of free debt management services in cold calling by lead generators on behalf of fee-charging debt management services; and if not whether they plan to instruct the Financial Conduct Authority to make such an assessment.
Answered by Lord Deighton
The Financial Conduct Authority has put in place binding requirements on fee-charging debt management firms to signpost customers to free independent debt advice at the first point of contact, including when contacted following a referral from a lead generator.
The FCA is monitoring the compliance of debt management firms with
its rules on an ongoing basis via its supervision of such firms and from 1 October 2014, all debt management firms are required to submit to the full scrutiny of the FCA authorisation process which will involve a comprehensive consideration of all aspects of their compliance.
The FCA is also undertaking an in-depth thematic review of the debt management sector to assess the quality of advice, looking at whether firms are recommending appropriate debt solutions, and how incentive structures and the use of lead generators may be affecting consumers.