Out-Law News 1 min. read
27 May 2022, 1:34 pm
The UK government’s recognition that different areas of the UK face different challenges with accessing cash, combined with its intention for the regulator to be able to use its powers to address cash access issues at a local level, should “contribute to safeguarding access to cash for customers across the UK”, according to one expert.
Andrew Barber, consumer finance expert at Pinsent Masons, said ministers had acknowledged that policy simplicity must be “balanced” with supporting cash access appropriate for the different needs of communities in the UK. “Whether such communities are in urban or rural areas, in Great Britain or Northern Ireland, such a balanced approach will surely be welcomed by most groups impacted by the reducing access to cash.”
The government’s response follows its industry consultation on access to cash, and sets out its planned approach to legislating for continued retail cash access in the upcoming Financial Services and Markets Bill.
The Treasury said it will designate firms for the purpose of ensuring continuing access to cash across the UK. The Financial Conduct Authority (FCA) will be established as the lead regulator for retail cash access and will be given appropriate powers for ensuring that designated firms continue to provide deposit and withdrawal facilities across the UK. The Treasury said the FCA’s proposed new powers would allow it to address cash access issues at both a “national and local level”.
Barber said: “While the policy response to a number of the questions raised in the Treasury’s consultation were to be expected, there were some areas where ministers clearly took on board respondents’ suggestions, recognising the way industry itself has been dealing with the market changes contributing both to a reduction in cash use - and access to it. Such recognition, alongside government’s acknowledgement of differences between urban and rural areas, combined with separate baselines for deposits and withdrawals, will allow a more tailored approach to policy. This should all play a part in ensuring better outcomes for customers across the whole of Great Britain and Northern Ireland who continue to rely on cash.”
“The government’s intention that the FCA be able to use its powers to address deficiencies at local level where they are resulting in adverse impacts on local communities should also provide consumer groups with some comfort that action may now be taken to address areas of concern for current access to cash,” Barber said.
He added: “The Cash Action Group received a number of mentions within the government’s response paper and it is clear that the Treasury sees it as potential key player in the ongoing issue of access to cash. Designation for oversight by the FCA may be seen by some as being an unnecessary burden, given so many of its industry participants are likely to be designated themselves. However, given the broad aims of the group to ensure ongoing access to cash it makes sense for the FCA to have an oversight role for the body - and any others that may be developed by industry.”
10 May 2022