North East Herts MP Sir Oliver Heald and 56 other MPs have written a joint letter to Nikhil Rathi, Chief Executive of the Financial Conduct Authority (FCA), urging him to change the rules around banking hubs, in a bid to unlock more for areas like North East Hertfordshire.
Since the passage of the Financial Services and Markets Act (2023), the FCA have become the regulator for LINK, the body responsible for assessing a community’s access to cash needs. LINK can recommend a banking hub or a similar scheme for a particular area. However, current FCA rules mean LINK are unable to recommend a banking hub until the last bank in town closes, subject to certain exceptions, risking a community’s access to cash.
The FCA are currently consulting on proposed changes to their rules. Among these include changing the “last bank in town” rule to a rule where LINK can intervene when the second-to-last bank in town closes instead.
However, Sir Oliver and his colleagues have urged the FCA to go a step further. The 57 MPs, representing eight different parties in the House of Commons, have called on Mr Rathi “to grant LINK the ability to operate on a case-by-case basis” and argue that when “the direction of travel is clear… LINK should be able to recommend a banking hub” while “a few branches remain.”
The MPs argue that such a move would allow staff to be moved over to a banking hub more seamlessly and “ensure that a community is not plunged into a limbo period” where they lose their access to cash.
The FCA’s consultation runs until 8th February but is primarily targeted at businesses and banks.
Commenting, Sir Oliver said: "I am pleased to join my colleagues in signing this letter. It should be made easier to set up banking hubs before all banks are lost in a town. This would relieve constituents of the distress and problems they can currently face."