9 March 2009
Local Building Society welcomes Parliamentary debate on Compensation Scheme levies.
Building societies are welcoming today's parliamentary debate which will highlight the impact of the Financial Services Compensation Scheme on mutual deposit takers.
The Westminster Hall debate, to be introduced by Ann Cryer, Labour MP for Keighley, follows a Parliamentary Early Day Motion that has quickly gained the support of 159 MPs.
Despite their prudent lending policies, building societies have been called upon to meet what is seen as a disproportionate percentage of the cost of the Financial Services Compensation Scheme, as Saffron Building Society Chief Executive Andy Golding explained:
"The FSCS is funded by levies from UK deposit takers, which means that those institutions with a simple model funded by retail deposits are paying the price for banks' failures. At Saffron, the value of the savings we hold is greater than the mortgages we have lent, therefore, along with the rest of the Building Society sector, are having to meet a greater percentage of the levy than the banks, who often lend more than they have on deposit."
"Building societies are naturally more cautious businesses, and we feel it unfair that we should be paying so dearly for being careful with savers' money"
The Parliamentary motion will be drawing attention to how the levies are impacting on Building Societies' funds. Andy Golding said:
"For Saffron, the amount involved will not bring our annual profit below acceptable levels. It will, however, cost us in excess of £1 million from our 2008 profits. Our members are extremely disappointed by the level of the FSCS levy."
"It is my hope that today's debate will persuade the government that the levies need to modified to reflect the risk profile of different financial institutions".
« In the News
