Sunday, 8 November 2015

The Sunday Read: The FT reports on the launch of Tynedale Community Bank

The Financial Times reports:

Britain’s newest bank plans to fight loan sharks and payday lenders by offering lower interest charges as it aims to give 50,000 people in south and west Northumberland a savings and lending alternative to big banks. 

Tynedale Community Bank, the latest so-called challenger bank, opened on Friday. Its average interest charges on loans are expected to be between 0.5 per cent and 3 per cent a month.

“Banks like the one we are creating in Tynedale will be a local bank that serves the 
community when too often it has seemed the other way round. We will not solve the banking sector’s problems overnight, but we will be helping to shine the light on a new way of banking in Britain.”The lender is the brainchild of Hexham Conservative MP Guy Opperman.

“People are fed up with banks disconnected from the local area,” said Mr Opperman.

The lender says it will plough any profits back into it. Initially, it will operate as a savings and loans operation. For now, there will be a £15,000 limit on loans, which will be individually assessed.

The bank, fully regulated and covered by the Financial Services Compensation Scheme, will not at this stage issue debit cards. Deposits into accounts can be made via internet banking from other accounts and withdrawals via the Faster Payments Service that all banks use. Savers will be paid an annual dividend.