Select Committee on Treasury Appendices to the Minutes of Evidence


Memorandum submitted by Mr Alan Debenham

  I seek to put forward my views to the Treasury Committee for the inquiry into services provided by banks and building societies and I should be pleased, therefore, if you would submit this letter to the committee.

  My concerns are with the Banking Code and the review process.

  I understand that monitoring performed by the Banking Code Standards Board has revealed that many banks and building societies are not adhering to the Code and my fear is that it is being used to present an appearance of respectability by some organisations, which is undeserved. I also believe that there is considerable scope for improvement in the monitoring and compliance process.

  I am aware that the Banking Code is currently under review and that this time the process begins with an independent reviewer appointed by the British Banker's Association before the BBA finalises the document.

  This appears to present an improvement over previous practice. However, I am concerned about publicity for the review process. I understand that the DeAnne Julius Review Group intended that the review should received sufficient publicity to allow members of the public to be given the opportunity to respond but publicity has been clearly lacking.

  I am concerned that the powers of the reviewer have been severely limited and are confined to a review of the Code alone. It appears that the reviewer's remit does not cover the Code Guidance, which represents the smallprint for the Code, and that remains firmly in the hands of the industry. This means, for instance, that the extent of publicity for the Code will depend upon how much the industry wishes it to receive and if that given to the review process is a guide then it will again be very limited.

  I am also given to understand that the remit of the reviewer does not extend to matters such as the inclusion of a clause to deal with cases where the Ombudsman finds against a bank or building society on one customer's account that affects many other customers such the rulings on TESSA and ISA accounts.

  I do not believe that the DeAnne Julius Group intended that these restrictions should be placed upon the reviewer or that the whole process for both Code and Guidance should no be open and transparent.

  In my opinion, the new review procedure is still very unsatisfactory and leaves much to be desired.

2 May 2002

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