Women Given a Poor Deal by the Banks

Labour Party

Evidence has come to light today that women are being discriminated against by banks.

The report, entitled ‘Women and Banks: Are Female Customers Facing Discrimination?’, by Noreena Hertz, looks at several cases where banks have discriminated against pregnant women and those on maternity leave. It also looks into the different treatment of male and female entrepreneurs when applying for venture financing loans. 

One bank manager told a mortgage applicant: women “get all indecisive about whether they’re going back to work” after child having children, according to Helen Rumbelow’s excellent article in The Times today.

In itself this comment in incredibly sexist, reminiscent of the 19th Century when women were frequently diagnosed with hysteria. Perhaps even more shocking is that the bank manager who made that comment is a woman.

I find it absolutely appalling that banks may be discriminating against women in this day and age. I am also surprised to find that the Financial Ombudsman supports the banks in this action, who said that was a “legitimate commercial judgement”.

Not only is denying an individual access to funds based on their gender ethically wrong, it is also completely illegal both in the UK and in Europe. These legal protections are the products of many years of progress through laws such as the Equality Act and pages of legal case work.

The sexist discrimination in the financial services industry does not stop here though. The report also highlights that women-owned firms are charged higher interest rates on their loans than comparative firms owned by men.

I struggle to see how women-owned businesses present a greater risk to financiers than their male counterparts. In fact several studies have shown that women owned businesses have a better credit rating overall.

It appears that the whole culture of this industry is geared against women succeeding in business. A study undertaken by the Labour Government in 2004 found women owned businesses were “more likely to face discouragement when applying for external finance”.

Such barriers to women becoming home owners, or their full participation as entrepreneurs are particularly disheartening at a time when they are being hit the hardest by Tory cuts and are looking for new ways to support themselves.  This is a serious issue that needs to be dealt with in the most robust way possible.  I only hope that this government, supposedly pro-business and home-ownership, will do everything it can to address this staggering inequality.