HM Treasury News Release

188/98                           12 November 1998
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TACKLING FINANCIAL EXCLUSION: BUILDING SOCIETIES HAVE
ROLE TO PLAY

Building societies were today challenged to contribute their
ideas to tackling financial exclusion in our most deprived 
neighbourhoods by the Economic Secretary, Patricia Hewitt.

Speaking at the Building Societies Association Annual Lunch the
Minister pointed out that there were between 2.5 and 3.5 million
people, concentrated in the most deprived neighbourhoods, without
a bank or building society account. The main reason being that
people did not think that traditional bank our building society
facilities were suitable for them. The Minister said:

     "The big challenge for banks and building societies is to
     redesign the products on offer to better suit the
     circumstances and preferences of those currently without
     access to them.

     "One important step forward is the availability of the new
     accounts where on-line debit cards replace cheque books and
     access to credit is withheld until both the customer and
     the institution feel comfortable with it.

     "The creation of these new accounts signals the industry's
     growing awareness of profitable banking opportunities among
     these sections of the community."

The Minister said that building societies have shown a tradition
in community involvement.  She said:

     "Based on your principle of mutuality and tradition of
     community involvement, building societies have a vital
     contribution to make to tackling financial exclusion. Many
     of you are already involved - indeed most of you carry the
     name of your community, and many support local activities
     too.

     "Combined with your expertise in financial services, you
     are ideally placed to be at the heart of this initiative.
     So I would like to challenge you to contribute your own
     ideas to tackling financial exclusion - to think hard and
     imaginatively about how financial services might be
     available to all in our society."



The Minister also urged building societies to think about how
they could help credit unions. She said:

     "I urge all building societies to think about how you can
     hep credit unions, not out of a sense of duty to those
     worse off than yourself, but because it will give people
     the opportunity, currently denied to them, to become valued
     members of your society.

     "So, by playing your part now you will help to build new
     customers for the future. We are not talking about charity,
     but about developing a market which in every sense of the
     word will be mutually beneficial to all concerned."


NOTES TO EDITORS

1.   Media copies of the Minister's speech is available from the
     Treasury Press Office on 0171 270 5185.

2.   Non-media copies are available from the Treasury Public
     Enquiry Unit on 0171 270 4558.

3.   If you have access to the Internet, you can find this news
     release and other Treasury information at http://www.hm-
     treasury.gov.uk



# = pounds sterling