‘People’s bank’ could lift a million out of poverty – report

[TrueBlueTerrier]

http://www.tribunemagazine.co.uk/2010/01/07/" onclick="window.open(this.href);return false;‘people’s-bank’-could-lift-a-million-out-of-poverty-–-report/

by Keith Richmond

A new report by Consumer Focus, the statutory body campaigning for a fair deal for consumers, says a million of the poorest people in Britain could be lifted out of financial exclusion by a new, simple and easy to use bank account at the Post Office.

The organisation wants the Government to introduce a specially tailored bank account as part of its “product plans” to bring in banking services through the Post Office network.

Andy Burrows of Consumer Focus said: “Millions of consumers miss out on even the most basic banking services and face daily hardship as a result. Many people on low incomes feel poorly served by the banks, but trust the Post Office. This is a golden opportunity for the government to lift thousands out of financial exclusion. The Post Office network is well placed to offer, not just this targeted account, but a range of neighbourhood banking products with wider appeal.”

There are almost the same number of Post Office branches – 11,956 – in Britain as there are branches of banks and building societies – 12,270.

Mr Burrows added: “Financially excluded people often struggle to access mainstream financial products such as bank accounts and low cost loans. This exclusion imposes real costs on individuals and their families as they are more likely to use sub-prime credit and pay interest many times that of a standard personal loan. These costs often contribute to spiralling debt.”

Prime Minister Gordon Brown announced plans to extend the range of banking services offered through the Post Office at the Labour Party conference last September. Consultation on this closes next month and the Consumer Focus research will form part of the body’s official response.

The Communication Workers Union has been campaigning for a fully-fledged publicly owned Post Bank offering a full range of services. CWU assistant secretary Andy Furey said: “This is hugely significant, both the clear evidence of strong public support for a comprehensive Post Office bank account and the fact that a statutory body such as Consumer Focus has called on the Government to act.”

[fishtank]

A great idea on paper but one question.

How would the EU react to a "publicly owned" bank effectively undercutting privately owned sub-prime lenders?

It's kind of like a "publicly owned" postal service undercutting a privately owned postal company and we know how they feel about that.