Financial mutuals have produced a list of actions for political parties ahead of the general election in May.
The Building Societies Association (BSA) and the Association of Financial Mutuals (AFM) have launched a four-pronged manifesto to help ensure consumers get a fair deal from financial services.
The campaign groups representing building societies and mutual insurers across the country have called for action from government and regulators to fix the regulatory and legal imbalance that could stifle the mutual sector.
A Manifesto for Financial Mutuals aims to level the playing field between shareholder controlled plcs and mutually owned providers. It calls for:
- A fair deal for consumers
- A level playing field for financial mutuals
- A rational approach by regulators to capital
- A more coordinated approach to promoting mutuals, creating a stronger savings culture and tackling the housing crisis.
This requires the parties to:
- Make it easier to run and set up mutuals by removing the restrictive barriers to raising capital
- Recognise the value of mutuals and stop the spread of heavy-handed regulation that favours large plcs
- Ensure that the regulators are carrying out their competition function in a way that fosters greater market diversity
- Recognise the importance of mutuals and joined-up policy on housing.
Robin Fieth, chief executive of the BSA, commented: “There is a widespread consensus that a diverse financial sector benefits consumers and the economy alike. Therefore, it is a bitter irony that in the effort to address poor behaviour by some plcs and prevent another financial crisis, the resulting legislative and regulatory framework threatens to undermine rather than support corporate diversity.
“Ratcheting up regulation across the board is leading to a matrix of rigid rules that is proportionately affecting mutuals. Instead, the differences inherent in the mutual structure should be considered side by side with other types of financial services businesses. Today we are setting out a plan to redress the balance and strengthen the mutual sector.”
Martin Shaw, chief executive of the AFM, added: “Consumers are being left with little choice but to go back to the very firms that caused the last recession in the first place. Far from fostering diversity and ensuring the financial sector is more resilient, the present regulatory landscape is tilted towards a one size fits all model.
“It should be a national scandal that not a single new mutual has been set up since the last decade of the last century. Politicians need to translate their aspirations for greater diversity into concrete actions to help the financial mutuals sector to compete on level terms, and to deliver a fairer marketplace for consumers.”
• Read the full manifesto online (pdf).