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- FCA rules to protect access to cash will come into force on Wednesday
New rules to protect access to cash for consumers and small businesses will go into effect on Wednesday.
The Financial Conduct Authority announced in June that the government had given it new powers to ensure reasonable access to cash withdrawals and deposits.
Under the new rules, banks and building societies will have to assess whether local communities lack access to cash services such as branches and ATMs, and provide additional services where they find “significant gaps”.
A major gap includes small towns in remote areas where the last bank branch has closed and one must travel a long distance to the next town to visit a branch.
Banks and building societies will have to assess local gaps in access to cash
From Wednesday, banks and building societies will have to assess cash access and understand whether additional services are needed to provide cash access when changes are made to local services, such as the closure of a bank branch.
Banks and building societies will be required to respond to local residents, community organisations and representative groups, who may request an assessment to determine whether there are gaps in local cash access.
Where significant deficiencies are detected, banks and building societies will have to provide reasonable additional cash facilities.
The FCA said the gaps in access to cash could be filled by a range of measures, including banking centres, ATMs (including deposit machines) and Post Office facilities.
The FCA will monitor progress and compliance with the rules.
Banks and building societies will be responsible for providing any additional services required by their assessments to access cash gaps.
If a bank closes a branch before alternative arrangements are put in place, or there are unreasonable delays in providing the required cash access services, it will be in breach of FCA rules.
Where the FCA identifies serious or persistent breaches of the rules, it will use the full range of its powers to tackle them.
A requirement will also be imposed on a bank to announce the closure of the last bank in a city where the Link ATM network recommends a center.
When a bank branch is about to close but is the last bank branch in town, it will not be able to close its doors until a banking center is open and operational.
In this way, no city should be left without access to cash services, whether through a bank, credit union or banking centre.
A banking center is a shared facility where customers of most major banks can go to withdraw and deposit cash and get banking assistance and advice.
They were created in response to widespread branch closures: 6,000 bank branches have closed their doors since 2015.
The Labour Party has pledged to establish 350 banking centres in cities and towns across Britain over the next five years.
15 localities will receive banking centers
Link will also announce 15 locations where new banking centers will be launched on Wednesday.
Harpenden in Hertfordshire and Whitley Bay in Tyne and Wear are among the towns to receive a banking centre.
The banks funding the centres (set up through a non-profit company called Cash Access UK) will change the rules on where a banking centre can be located.
Currently, a banking center can only be set up in a city that has lost its last bank. Banks were also ruled out in cities where Nationwide still had a branch.
Nationwide has its own Branch Promise, meaning that wherever there is a Nationwide branch, that branch will remain in place until at least early 2028.
Most of the 15 banking centers to be announced Wednesday will now be in areas where Nationwide has a branch.
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