I’ve long campaigned against the relentless programme of bank closures and the impact this has on customers, small businesses and on our high streets.

The Financial Conduct Authority have been consulting on the guidance they provide to banks and building societies when they propose to close or when ATMs are closing or being converted from free to pay-to-use.  Read my full response to this consultation here:

Financial Conduct Authority
12 Endeavour Square
London E20 1JN

25 July 2022
Our Ref: ZA14393

Formal response to FCA consultation on Branch and ATM closures or conversions (GC22/2)

I welcome this consultation on how banks and building societies assess the impact on customers when they plan to close a branch, remove or convert an ATM or reduce the services they provide.  In my constituency of Hornsey & Wood Green, we have seen a number of bank closures in recent years and a dramatic drop in free-to-use ATMs.  I am extremely concerned about the impact this is having on customers, small businesses and our high streets.  Please find below my full response to your consultation questions.

Q1: Do you agree that we should extend the definition of closures as proposed (to include partial closures caused by a long-term reduction in opening hours or services which would have a significant impact on customers)?

Yes.
 
Q1: Please explain your answer
 
During the pandemic, we saw an increase in the number of banks and building societies temporarily reducing hours or service provision yet in many cases these changes have not been reversed.  This has an impact on small businesses, who may need to safely deposit cash at specific times and on customers, particularly elderly and disabled customers, as it severely restricts access and can lead to lengthy queues during the limited opening hours.  I believe it’s vital that these changes are treated in the same way as a full closure in recognition of the impact they cause.
 
Q2: Do you have any comments on the other proposed changes to our guidance?

I strongly support your proposal to extend consultation and would like more weight to be given to consultation responses.  In my constituency of Hornsey & Wood Green several bank branches have closed over recent years.  On all occasions there has been a strong outcry of opposition from residents, customers and traders’ associations, with my full backing, yet on all occasions this has been ignored.  As well as the FCA proposal to consult charities and councils, I would like to see local traders’ associations and Business Improvement Districts (BIDs) included in any consultation in recognition of the significant impact bank closures have on high streets and on small businesses.  Many small traders have told me how unsafe they feel travelling long distances to deposit cash.  
 
I would also like to see the guidance recognise the cumulative effect of bank closures on an area.  To give one example, when Barclays Bank in Muswell Hill in my constituency closed recently, a constituent told me they used to use the Highgate branch.  When that closed, they sent him to Hampstead, then Temple Fortune, then Muswell Hill.  Now they’re all closed too and they’re telling him to use Crouch End.  Where does this end?  It is easy for banks to provide customer information directing them to another nearby branch when they propose a closure, therefore suggesting that the impact is limited.  This is not an accurate reflection of the reality of repeated closure programmes and should be taken into account.

With regard to ATMs, my constituency is being hit hard by the cost-of-living crisis and many residents are struggling to pay their bills.  At the same time we’re seeing many free-to-use ATMs disappear or turn into pay-to-use ones.  In 2017 Hornsey and Wood Green had 153 free-to-use ATMs and no pay-to-use ATMs.  Fast forward to the most recent figures, and we have just 91 free-to-use ATMs and 28 pay-to-use ATMs.  This fall is being replicated countrywide and is damaging for the 8 million adults who would struggle to cope in a cashless society, particularly the 1.9 million people who rely on cash for nearly every transaction they make.  I would like to see all ATMs free to use given the huge number of branch closures.  I would also like to see the FCA guidance extend beyond banks and building societies to include other providers of ATMs including the Post Office network and the LINK scheme, in full recognition of the impact particularly in deprived communities of charging people to access their own cash.  
 
Finally, whilst I note your guidance is not intended to overlap with the legislation on protecting access to cash and the new powers for the FCA that the Government has announced, I support the calls by Which? to put an immediate pause on bank branch closures until legislation kicks in to protect the fragile cash network. 

Yours faithfully,

Catherine West
Member of Parliament for Hornsey & Wood Green