Mutuals news – January 2018

Print publication


Walker Morris’ Banking Litigation specialist highlights some recent news and upcoming key dates of interest to mutuals.

  • On 20 December 2017, the Building Societies (Restricted Transactions) (Amendment to the Limit on the Trade in Currencies) Order 2017 (SI 2017/1307) was published, along with an explanatory memorandum. The Order amends section 9A of the Building Societies Act 1986 (BSA 1986), to increase the maximum amount of currency that building societies can convert from £100,000 to £3 million. This should mean that, as of 6 April 2018 (when the Order comes into force), building societies should be better able to compete with banks, which do not face such restrictions, and that the BSA 1986 should be more in-step with the increasingly international nature of the UK property market.
  • ‘Open Banking‘ will go live for Allied Irish Bank, Bank of Ireland, Barclays, Danske, HSBC, Lloyds Banking Group, Nationwide, RBS Group and Santander on 13 January 2018. With mixed messages being cited in the media (namely, greater competition and enhanced consumer benefits on the one hand; and data handling and security concerns on the other), it will be interesting to see whether smaller mutuals, who are so far unaffected, are impacted at all as a result.
  • Following the introduction of the EU Payment Services Directive (PSD2) on 13 January 2018, online services that customers allow to access their account data or make payments on their behalf will be regulated by the FCA.  PSD2 will bring about a number of important changes for building societies and their customers.  To support these changes, the FCA has produced a web page setting out key information.
  • Forecasts for UK house prices in 2018 are generally muted, with many expecting prices nationally to remain flat or even in some places (including London) to fall. While for many that may seem a fairly bleak outlook, it could, of course, mean good news for first-time buyers – particularly when combined with the recent stamp duty threshold increase to £300,000.
  • As from 1 January 2018, as part of the UK Government’s efforts to deal with illegal immigration, banks and building societies will face new Immigration Act 2016 requirements to cross-check the details of all existing personal current account holders against a Home Office database of illegal migrants or ‘disqualified persons’.  This is part of the UK Government’s efforts to prevent and discourage illegal migration.  Where accounts operated by or for such persons are identified, the bank or building society must notify the Home Office and may be required to close those accounts. Failure to comply with the requirements could lead to punitive action being taken by the FCA in the form of financial penalties, restrictions on deposit-taking permissions or even criminal sanctions.  Most mutuals will now have in place appropriate internal policies and procedures and it is to be hoped that the new requirements will not mean too much of an additional administrative burden.