Mutuals’ funding rules may be eased

BUILDING societies could see their funding rules relaxed to boost their appeal as an alternative to major high street banks under proposals unveiled by the Government.

By The Newsroom

Published 7th Jul 2012, 07:00 BST

The Treasury is considering allowing mutuals – such as Yorkshire, Skipton and Leeds building societies – to raise more funding from so-called non-members. Members include customers with mortgage borrowing and shareholding investors.

Building societies can currently only source 50 per cent of their funding from non-members.

The Treasury’s vision for the sector, which will go to consultation, sets out how the recent recommendations of the Independent Commission on Banking will apply to the building society sector.

Adrian Coles, of the Building Societies Association, welcomed the Government’s move to support a thriving building society sector in the UK. “Our sector is diverse and provides services to around 25 million customers, through a model that is very different both in structure and ethos to the plc banks,” he said.