Reform the banking system, says open letter from sector to party leaders

Better Banking Coalition wants greater transparency and a community reinvestment act, so that specialist sector organisations would get money from the banks

Better Banking Coalition logo
Better Banking Coalition logo

More than 500 third sector organisations and leaders have signed a letter to the leaders of the three main political parties asking for reform of the banking system to help charities and people on low incomes.

The open letter from the Better Banking Coalition calls on whoever forms the next government to require banks to introduce greater transparency about their loans. It also asks for the introduction of a community reinvestment act, which would require banks to provide more services in deprived areas or fund specialist third sector organisations such as community development finance institutions and credit unions to do so.

It asks leaders to introduce a cap on lending rates to protect borrowers from loan sharks and bring in a requirement for all banks to invest 1 per cent of their profits in grants to deprived communities.

The coalition was set up by a small group including chief executives body Acevo, not-for-profit investment house CCLA, social lender Fair Finance and the London Rebuilding Society.

It has since been supported by major charities including Oxfam, Crisis, the RNIB and Mind, as well as other umbrella organisations and specialist third sector lenders.

"We feel strongly that, in return for the privilege of a banking licence, and for the billions of pounds of public money spent bailing out the financial sector over the last two years, we deserve a financial sector that works to benefit everyone, rather than just a select few," the letter says.

"We need a system that actively encourages financial institutions to engage with low-income communities, third sector organisations and small businesses; one that enables them to become financially independent, to build savings and pensions and to have every opportunity to flourish financially and economically."

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