FCA Requires Building Societies to Justify New Overdraft Interest Rates

January 2020 – The Financial Conduct Authority (FCA) has asked building societies and banks to justify their new fees for arranged and unarranged overdrafts.  Only 7 months ago the FCA asked building societies to simplify the structure of their rates  and ensure that charges were the same for unarranged and arranged overdrafts.  However building societies and banks then introduced new figures simultaneously that were not only high but were remarkably similar at 39.9%.  While the FCA did not suggest collusion the lack of competition is a cause of concern.

The FCA letter is asking societies and banks a number of pertinent questions to answer.