Compensation Fund urged to repay £7.2m fee to Dunfermline Building Society
March 23, 2009 9:57 AM
Originally published by Scottish Liberal Democrats
Originally published by Scottish Liberal Democrats
The Financial Services Compensation Scheme has been urged to refund the £7.2m paid by the Dunfermline Building Society this year.
The call came from Dunfermline MP Willie Rennie who has been campaigning to keep the Dunfermline Building Society as an independent Scottish mutual following reports about its future. He said the Scheme's funding formula was like forcing the country's building societies to wear a pair of concrete boots while swimming across the River Forth.
The Society paid 7.2m to cover the Bradford and Bingley, London Scottish and Icelandic banks but the MP believes the fund adversely penalises building societies as the fee is based on the level of deposits rather than the risk profile of the institution.
'If reports are accurate the Dunfermline needs support,' said the MP. '7.2m is a huge sum for a Society like the Dunfermline and should be paid back immediately.
'We need a more sensible scheme that recognises the less risky nature of building societies as opposed to banks.
'Together with the increased reserves required to covering loans this Scheme's funding formula was like forcing building societies to wear a pair of concrete boots while swimming across the River Forth.'
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