Financial Services Bill

Lord Phillips of Sudbury Excerpts

Tuesday 20th November 2012 Lords Chamber

[Baroness Hayter of Kentish Town]

My Lords, this amendment stands in the name of my noble friend Lord Eatwell and myself. It relates to passporting and, in particular, where a UK-authorised bank works in another EEA member state. Our concern, as we raised in Committee, is about adequate protection for consumers in those EEA states. This amendment would require the relevant authority, be it the FCA or the PRA, to require banks to make clear, prominent warnings to consumers where their deposits are not covered by the Financial Services Compensation Scheme. It is fairly obvious that it is vital that consumers know precisely and clearly whether their deposits would be covered by this compensation scheme and the extent of such coverage.

In Committee, the Minister assured us that it was sufficient for such a requirement to be in the regulator’s rule book. We have considered this further and we would beg to differ. It is such an important area of consumer protection and really important for the confidence in our banks that we must ensure that every depositor knows the security of their deposit. Furthermore, given that we saw a range of views in Committee on where and how such warnings to customers should appear, it is important that consumers themselves are consulted on this so that the most effective method of communication is used. I beg to move.

[Lord Phillips of Sudbury]

My Lords, I am generally sympathetic to Amendment 77AA, but what would the consequences be of a breach of its provisions?