New rules on access to cash come into effect this week β here’s what’s changing
- FCA rules to protect access to cash come into effect on Wednesday
New rules come into effect on Wednesday to protect access to cash for consumers and small businesses.
The Financial Conduct Authority announced in June that the government had given it new powers to ensure fair access to cash withdrawals and deposits.
Under the new rules, banks and building societies will have to assess whether local communities lack access to cash services, such as branches and ATMs, and offer additional services where they find βmajor shortagesβ.
For example, a large gap occurs in small towns in remote areas where the last bank branch is closed and one has to travel a long distance to the next town to visit a branch.
Banks and building societies will need to assess local shortages in access to cash
From Wednesday, banks and building societies must assess access to cash and consider whether additional services are needed to provide access to cash when changes are made to local services, such as the closure of a bank branch.
Banks and building societies must respond to requests from local residents, civil society organisations and representative groups. They can then request an assessment to determine whether there are any local gaps in access to cash.
Where significant shortfalls are found, banks and building societies will be required to provide reasonable additional cash services.
The FCA said gaps in access to cash can be filled in a number of ways, including through banking hubs, ATMs (including cash machines with deposits) and post offices.
The FCA monitors progress and compliance with the rules.
Banks and building societies are responsible for providing additional services necessary for assessing access to liquidity shortages.
If a bank closes a branch before alternative arrangements are made, or if there are unreasonable delays in providing the required cash access services, the bank will be in breach of FCA rules.
Where the FCA identifies serious or persistent breaches of the rules, it will use all its powers to address them.
There will also be an obligation imposed on a bank that announces the closure of the last bank in a city where the ATM network Link recommends a hub.
If a bank branch is closing soon, but it is the last branch in the city, it cannot close until a banking hub is open and operational.
In this way, no city should be left without access to cash services, whether through a bank, a building society or a banking centre.
A banking hub is a shared centre where customers of most major banks can withdraw and deposit money and get banking support and advice.
They were created in response to the widespread closure of branches. Since 2015, 6,000 bank branches have closed their doors.
Labour has pledged to open 350 banking centres in towns and villages across Britain over the next five years.
15 locations to receive banking hubs
Link will also announce on Wednesday the 15 locations where new banking hubs will open.
Harpenden in Hertfordshire and Whitley Bay in Tyne and Wear are among the towns to get a banking centre.
The banks funding the hubs β set up through the non-profit organisation Cash Access UK β will change the rules on where a banking hub can be located.
Currently, a banking hub can only be set up in a city that has lost its last bank. They were also excluded from cities where Nationwide still had a branch.
Nationwide has its own establishment promise. This means that wherever there is a Nationwide establishment, that establishment will continue to exist until at least the beginning of 2028.
Most of the 15 banking hubs announced on Wednesday are in areas where Nationwide has a branch.
SAVE MONEY, MAKE MONEY
Investment boost
Investment boost
5.09% on cash for Isa investors
Cash Isa at 4.92%
Cash Isa at 4.92%
Including 0.88% bonus for one year
Free stock offer
Free stock offer
No account fees and free stock trading
4.84% cash Isa
4.84% cash Isa
Flexible Isa that now accepts transfers
Refund of transaction costs
Refund of transaction costs
Get Β£200 back on trading fees
Affiliate links: If you purchase a product, This is Money may earn a commission. These deals are chosen by our editorial team because we think they are worth highlighting. This does not affect our editorial independence.