Richard Burgon – 2016 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Richard Burgon on 2016-06-15.

To ask Mr Chancellor of the Exchequer, what assessment his Department has made of the effect of a FCA-regulated monthly maximum charge on unarranged overdrafts for personal current accounts.

Harriett Baldwin

The Government is clear that consumers must be able to access clear and transparent information about the charges that may apply to financial services products, including bank accounts. In addition, the Financial Conduct Authority requires firms to be clear, fair and not misleading when giving information to consumers, including on fees and charges.

The Competition and Markets Authority (CMA) is currently undertaking a market investigation into competition within the retail banking market, including personal current accounts. In its May 2016 provisional decision on remedies, the CMA proposed requiring banks to take steps including: a monthly maximum charge for unarranged overdrafts; alerts to help customers avoid unarranged overdraft charges; improving comparisons by allowing customers to share data on transactions with other banks and trusted third parties; and regular prompts for customers to check that they are getting good value from their banking provider.

The CMA’s investigation is ongoing and it is currently consulting on the provisional decision on remedies. The Government welcomes the CMA’s work as a crucial step towards the goal of a highly competitive banking system, and stands ready to take action as necessary once the CMA publishes its final report in the summer.