As is very often the situation in the UK, where the United States lead we seem to follow, but are Banking and Financial Services included in this trend? You may be surprised.
The straight answer to the question above is, No, we do not have the right to banking services, but we should have the option. A recent study comparing UK Banking practices against US practices in the disclosure of lending to social groups, and areas of differing wealth has thrown up some stark contrasts in the way information is disseminated.
There has long been a feeling in the UK that certain groups of society and areas of the country are not fully serviced with financial services, leaving many of societies most needy to rely on other types of funding - hence the expansion of “money lenders”. A small car loan, or housing improvement loan can suddenly multiply if payments are missed, and for a long time the government have been powerless to act. It is only recently that laws have been introduced outlawing “unreasonable” penalties and rates of interest, but is this protecting the more needy of society?
The truth is that nobody knows, because no bank in the UK has ever released a breakdown of their clientèle, there lending patterns, and highlighted problem social areas. This is in stark contrast to the US banking industry where banks such as Charter One Bank (www.charteronebank.com) have released details of their regional lending patterns since the early 1970s. This is in stark contrast to UK Banks such as Royal Bank of Scotland (www.rbs.co.uk) who actually own Charter One Bank, but have never released regional breakdowns for the UK business.
How would the disclosure of social lending help?
While the finance industry is one of the most cut throat of industries in the UK, and heavily targeted towards reliable profitability, there seems to be a definite lack of social responsibility to certain areas of society. Recent events such as the announcements that thousands of post offices will be closing is further highlighting the lack of social responsibility.
Perversely it is very often the people who are excluded who actually require financial assistance the most. More than the well backed high rollers who can negotiate extremely good terms because of their credit history and asset backing. If banks were “invited” to disclose their areas of lending, this would highlight particular parts of the country / society who would benefit form more state assistance. This in turn would allow the government to focus extra help in these deprived areas, where the real help is need.
