Plans for a community bank to tackle financial inequality in Liverpool have taken a major step forward after its registration was given the green light by the financial regulator.
Liverpool City Council has joined forces with local authorities in Wirral and Preston to create the not-for-profit enterprise – North West Mutual Ltd – which was approved by the FCA on 28 May 2020.
The aim is to help the most vulnerable people and small businesses struggling to access the banking services they need, particularly as the city recovers from the impact of coronavirus.
Mayor of Liverpool Joe Anderson said: “The COVID-19 crisis has exposed what we already knew to be the huge inequalities across our city, and this economic crisis is exacerbating the situation.
“More and more people are having to use bank accounts to access welfare support such as Universal Credit and it is vital they don’t get financially penalised for doing so.
“It is getting increasingly hard and more costly to access cash – you have to travel further to a branch and using a local ATM often incurs a charge, adversely affecting those who can afford it the least.
“The current banking system is failing the poorest and it is right and proper that we step in to maintain access to services which should be universal – not just banking but also loans and mortgages.
“We are making good progress on this but clearly it is really important that this is a robust enterprise and we have to meet the same tests as high street institutions.”
Due diligence advisers have been selected and their appointment is in the process of being confirmed and the next stage will be for them to review the Business Plan.
The North West Mutual will have a social mission focused on the following:
· the creation of a bank to serve the everyday financial needs of ordinary people, local community groups and small and medium sized companies
· help redress regional inequalities, make financial inclusion the norm, build and store community wealth
· significantly increase the proportion of bank lending going to the ‘real’ (non-financialised) economy and SME’s instead of the financial economy
· build regional economic resilience and
· bring about a revitalisation of customer service, relationship banking and mutual trust.