Wednesday, 26 August 2015

A cheque from the building society and a Japanese bank

A couple of weeks ago, I got a cheque in the post from my building society. Back in 1992 I started saving with the Ecology Building Society, based in Silsden, West Yorkshire. There is not much more to them than the name suggests: they are a society that supports ecological building.

I'd got a letter from them a little earlier saying that, after much deliberation, they had decided to close all accounts of non-UK residents. They said this was a result of the recent FATCA regulations, which as far as I understand give US tax officials power to investigate all the money in the world. Every cent, penny, kopek, and, if Greece leaves the Euro and they come back, every lepta. 

New regulations mean it is not possible for the Ecology Building Society to open new accounts for non-residents. While there are no regulations stopping them from keeping existing accounts, it would create extra bureaucratic complexity. In spite of my disappointment at no longer being able to save with them, if it means that they can tell the US tax officials to go away, then they have my full support. I would even endorse the use of stronger language.

When I got the first letter, I should probably have instructed them to transfer the cash to my other UK bank, in the hope that they are not going to follow the same path. Or perhaps I should have instructed them to transfer the money to my Japanese bank, but as usual I neither reached a decision nor an action, and a letter with a cheque enclosed duly arrived in the post. 

Now that I had a cheque, I decided to visit my local bank, just for fun. 

I have a sterling account there, as well as the yen account my salary is paid into, and a mortgage for the house and land. Paying a sterling cheque into a sterling account: how difficult could that be?

The first question from the woman behind the counter in the foreign exchange area of the bank was where the cheque came from. As a Japan tax payer, I'm liable to any income, in Japan or overseas, and the tax authorities will automatically investigate any large sums transferred, so banks must provide details of where funds came from. In this case it was my money coming from my account in the UK to my account in Japan, so there was no income, and no tax liability. I told them it was from the Ecology Building Society.

"What's a building society?" she asked.  

I should probably have been prepared for this question. I think she was doing quite well not to have asked, "What's a cheque?" This may have been the first one she had ever seen. It was certainly the first one I'd seen for a while. 

I didn't go into the history of building societies, from their beginnings in the Midlands in the late 18th century based on the principles of co-operation, and their subsequent spread in the north of England and around the country. 

The first building societies were terminating, so a fixed group of people would get together, pool their savings to increase collateral, start building the first member's house when they had enough, and all continue paying in to their mutual fund until the last person had built theirs. 

Next came permanent building societies that continued to add new lenders and borrowers. These continued into the twentieth century, reaching the high streets of every town and city in Britain, and probably responsible for the relatively high home ownership there.

Then came the 1980s and changes in regulations that let building societies act more like banks. At first sight this seems a good thing, but it led to a lot of demutualisation--a word as ugly as the concept it expresses. The 1980s was also the time the Ecological Building Society started, inspired by people who were trying to borrow money to build ecological buildings, but getting flatly rejected by the existing lenders. While the traditional building societies were merging with each other, being bought up by larger public limited companies, and selling themselves to investors and carpet baggers, the Ecology Building Society was founded on that deeply human idea of mutuality, by which it still holds. 

But instead of going into this history, I just told the woman behind the counter, "It's a kind of bank." 

My first visit to the Japanese bank took a good half hour, and we established that I'd need to show a statement from the building society, to prove that these were indeed my savings, and not income from some undisclosed nefarious activities. 

I wanted to know how much they were going to charge, and later she called to say it would be 2,500 yen, plus 600 yen for postage. This seemed extortionate, but affordable. 

The next day I went back to the bank, armed with the necessary documentation, and with a free morning. All seemed to go as smoothly as could be expected. After about an hour the documents had been photocopied, and I'd paid them the handling fee in cash, since it would obviously have been too complicated for them to charge it to my account there. The forms were all filled in, signed and stamped and I thought I could go. Then she said that she'd let me know how much they were going to charge for paying the money into my account in a couple of weeks, since it would depend on the exchange rate at the time it was paid in. 

I got rather upset then. I'd already paid them to take the cheque, and now they were telling me they were going to charge me again for paying the money into my account. The day before I had asked how much they were going to charge, and they had given me a price. Now they were telling me it was going to increase it by an unspecified amount. The woman's boss came over and showed me a tariff, which did indeed say that they would charge for money being paid into their foreign currency accounts. I suppose this was obvious to them. Not to me though. 

I told them to give back the cheque and the photocopies they had made, and that I would pay it in somewhere they did not charge for taking money. I've been contemplating sending them an invoice for my time. 

And the moral of this story is: don't try to pay cheques into Japanese banks.

But if you are living in the UK and have any spare cash, or if you're looking for a mortgage for a building project, please get in touch with the Ecology Building Society.