The Treasury Select Committee (TSC) has begun investigating the banks’ treatment of SMEs, covering everything from lack of financing to bullying.
The investigation follows media pressure and a number of reports, including the Tomlinson Report into complaints about RBS, and details relating to the Financial Conduct Authority’s investigation into mis-selling of Interest Rate Swaps (IRS) to SMEs.
Arguably, though, the pressure for a thorough investigation began in December 2011, with the formation of Bully Banks, an independent organisation to lobby for investigation and action on the IRS scandal. Membership of Bully Banks has now reached more than 2000 and all are SMEs.
Bully Banks (www.bully-banks.co.uk) has campaigned for action to help SMEs recover their money, but this year it widened its campaigning following Tomlinson and the emergence of another potential mis-selling scandal affecting banks’ use of the Enterprise Finance Guarantee Scheme (EFG), which we was covered in a recent blog.
The investigation by the TSC would suggest the group may have achieved its objective, at least partially.
The question is whether the TSC has the teeth to do what Bully Banks wants and if it does find evidence of bank mistreatment of SMEs, what recommendations would you want to see and what likelihood is there of the banks actually taking notice or acting?