FCA 'should probe Yorkshire Bank'


FCA 'should probe Yorkshire Bank'

The financial services watchdog will be made aware of complaints against Yorkshire Bank after it was accused of an "abuse of capitalism" in the way it treated its customers.

Treasury Minister Sajid Javid said he would speak to the Financial Conduct Authority (FCA) after four MPs complained businesses in their constituencies were being penalised by rocketing interest rates and unfair charges if they wanted to pay off their loans early.

Tory MP Philip Davies (Shipley) accused the bank of an "abuse of capitalism", claiming it was penalising good customers to recover its own losses.

And his Conservative colleague David Mowat (Warrington South) said that since the owners of the bank had decided two years ago to focus its business in Asia, they had "aggressively reduced" the size of its loan book in the UK.

Labour MP Clive Betts (Sheffield South East) said the FCA should now investigate.

In a question to Mr Javid, who is Financial Secretary to the Treasury, Mr Betts said he had received dozens of complaints about business loans with very high rates of interest and high redemption clauses.

Mr Betts said: "Could you look at involving the FCA to see whether there could be an investigation in to what has been going on?"

Mr Javid replied: "I can tell you I would be more than happy to raise this issue with the FCA."

Moments earlier, Mr Mowat had complained about the bank. In his question to Mr Javid, he said: "You may be aware that two years ago the owners of Yorkshire Bank announced their intention to downsize in the UK and invest more money in Asia.

"Since then they have aggressively reduced the size of their UK loan book, in spite of assurances made to small businesses. This has affected many businesses across the country, including Arley Homes in my own constituency, which was brought in to administration with the loss of many jobs.

"Is there more we can do to make them behave responsibly?"

Mr Javid replied he could not tell the bank how to structure its business but insisted it should treat its customers fairly.

He said : "How a bank structures its business is a commercial decision, which I am sure you will appreciate that I am unable to comment on.

"However, if a bank does decide to restructure its business in a certain way, I would expect them to pay due regard to the interests of all its customers and treat them fairly."

Mr Davies also complained. He said: " The point of capitalism is that people, when they take risks, they should be rewarded if they are successful and they lose money when they fail.

"Yorkshire Bank has been among the worst at penalising their good customers to try and make up for the losses that they have incurred themselves.

"That is an abuse of capitalism and I hope that you will take steps to ensure that Yorkshire Bank treats its customers fairly because in too many cases, it has been treating them terribly unfairly."

Mr Javid replied: " We want all banks to treat their customers fairly and this is something that this Government is absolutely committed too."