New Banking Code?

I assumed that the take over of the Banking Code by the Financial Services Authority (FSA) is going to make a much more useful regime, from the point of view of the debtor.

Now I am far less certain.

Catching up on material like the comments to the last review of the code, and comments on the FSA proposals, I find that the FSA proposals appear to change from the rule approach to a ‘principles-based’ one.

Now your guess is as good as mine as to what that means. Next month the FSA is to publish its proposals – for adoption in November. Do keep an eye open for these proposals.

The Citizen’s Advice Bureaux (CAB), for example, expresses great concern about the proposed changed of style and the fact that the enforcement will be even less than the limp penalties under the British Banking Association (BBA) regime.

CAB points out that the very ones who are most likely to suffer are the vulnerable, the very ones that any system of regulation is most vital to. And, boy!, what grand quagmires lie ahead for interpretation of principles.

The ordinary debtor already faces a seriously uphill struggle. The information most needed is obscure, the area is one they are not familiar with, and they face trained and professional takers backed by massive organisations who wear their legal departments like the six guns of a ‘black hat’ in western films.

The FSA, the FOS and the OFT are all supposed to be making that ‘playing field’ more level and refereed. With this change in prospect my fear is that the field will turn into a blood bath of the innocent. Just like Peterloo.

[Peterloo happened shortly after the Battle of Waterloo and named as a disgraceful mirror of that greatness. It happened on St Peter’s Field near Manchester in 1819. This peaceful meeting was demanding the reform of the parliamentary system – déjà vu!

The crowd of over 60,000 unarmed civilians was charged by cavalry. The whole history of the period was one of the two Britains; that of the industrial and agricultural owners and that of the ordinary people. At least Peterloo shamed the political leadership and reforms followed.

The great 1832 Reform Act was one and the introduction of a civilian police force another. The latter unarmed in response to the shame of Peterloo.]

Joseph Harris
Debt Control Man

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