Housing activists have forced NatWest branches across the country to close as part of wider actions attended by hundreds protesting against the bank’s policy of discriminating against renters claiming housing benefit.

A clause in NatWest’s buy-to-let mortgage agreement with landlords forbids renting to DSS tenants, a reference to the now-defunct Department for Social Security, with the protests sparked by a recent case that campaigners said highlighted the injustice of the policy.

A landlord with a NatWest mortgage was last month refused a remortgage, and was threatened with the revocation of their existing mortgage because they were letting to a tenant, a vulnerable older woman, in receipt of housing benefit.

The landlord was then given an ultimatum demanding they either pay a large penalty fee or evict their tenant.

“NatWest’s blatant discrimination against housing benefit claimants is another reminder that our rigged housing system prioritises profits for landlords, investors and banks over everyone’s need for a decent home, and it should be brought to an end immediately,” a spokesperson from London Renters Union, Acorn and Living Rent said.

“Ten years ago, the British public paid an astronomical £45.5bn to keep Natwest’s parent company, RBS, afloat. The public majority own NatWest, so it’s a disgrace that the government is happy to let NatWest deny housing to vulnerable renters despite getting massive state support and losing £130bn since we bailed them out.”

In Stratford, east London, the bank’s branch on Broadway closed after demonstrators went inside and delivered an eviction letter with their demands.

Holding banners that said “People before profit” and “People on benefits need homes too”, and chanting “NatWest, shame on you”, the protesters said customers were supportive of their actions.

A coalition of renter action groups groups including Acorn and Living Rent also organised sister protests in Brighton, Glasgow, Newcastle and other major cities.

Activists in Manchester occupied a branch of the bank, doing the same in Sheffield, while in Bristol, protesters chanting “Scrap that clause” and “Yes DSS” forced their way in to the premises and eventually forced it to close.

Campaigners argue that NatWest’s policy breaches the Equality Act. Earlier this week, MPs criticised NatWest for operating what they call a “housing blacklist”, with the chair of the work and pensions committee, Frank Field, saying that the policy was a return to “the wicked old days of housing discrimination”.

According to research by housing charities, the 1.5 million people living in the private rented sector claiming housing benefit face significant discrimination in access to housing with one in three renters on housing benefit prevented from renting a home due to “no DSS” discrimination.

TSB and Santander have previously abolished similar policies to NatWest, which said this week it is reviewing its lending practices.

The CEO of the Royal Bank of Scotland group, which owns the bank, expressed the bank’s “extreme disappointment” to MPs over the way the landlord’s case was handled in a letter on Tuesday.

Ross McEwan wrote: “In line with a number of other lenders … our mortgage policy for landlords with smaller property portfolios … includes a restriction on letting to tenants in receipt of housing benefit.

“This reflects evidence that rental arrears are much greater in this segment of the market and we are satisfied that this restriction does not contravene equality legislation.”

After the nationwide protests were announced earlier this month, a NatWest spokesperson told the Bristol Post: “We are currently in the process of conduction a review of our policies in this area, and have invited organisations such as Shelter to contribute to it.”

NatWest has been contacted for further comment.