Little room to change account rules - bankers

The Irish Bankers' Federation (IBF) said today it was willing to meet the Minister for Social and Family Affairs to discuss difficulties lone parents face opening bank accounts.

But it warned EU directives on money laundering meant there is little room to change the rules.

Seamus Brennan said this morning he would meet the IBF to discuss why some lone parents and social welfare recipients faced obstacles when they tried to open a bank account.

These difficulties were forcing many to deal with money lenders, according to a report by the One Parent Exchange Network (Open), which surveyed 139 people in seven locations who reported financial difficulties.

The report found people on low incomes pay more for credit because they are forced to use money lenders due to not having access to credit from banks.

IBF chief executive Pat Farrell told ireland.comtoday there were "standards required for identification".

He said: "They are not set down specifically by banks. They have to be set out in accordance with EU directives on money laundering. . . . There is a wide cross-section of interests involved in setting out those guides.

"The sector has put forward in various representations to Government the development of a universal bank account with the proposal as part of a wider national payments strategy."

Mr Farrell said: "This would be a card-based service that would provide basic access to payments infrastructure. It was put forward as an integral part of the whole need for national payments strategy, to release the reliance on cash and cheques."

Commenting on the Open report Mr Brennan said: "I acknowledge that the banks are striving to improve access for all and are assisting in a debt settlement pilot programme, and I thank them for their commitment in this regard.

"However, I am concerned that the pace of progress is not sufficient and as a result may be excluding people who are attempting to gain greater control over their personal finances. I am not asking the banks and other institutions to give away money free or for any special treatment for those on welfare and low incomes.

"All I am saying is that this report highlights what appears to be some element of discrimination against welfare customers. What I want to see is a level playing field for all customers which guarantees that people who are welfare recipients will be treated equally with the other customers of the banks and financial institutions," Mr Brennan said.

According to the report, lone parent households faced an average debit of almost €8,000. On top of this they faced utility bill arrears of over €1,000. Among those surveyed almost four out of five had weekly incomes of between €100-€300.