Kalyeena Makortoff Banking correspondent 

UK banks to be given two weeks to explain closing of customer accounts

Regulator to write to more than 20 of largest lenders after Nigel Farage’s accounts were threatened with closure
  
  

FCA signage
The FCA will also force lenders to reveal how many complaints they have fielded from barred customers. Photograph: Toby Melville/Reuters

The City regulator will give the UK’s largest banks two weeks to explain why they have been shutting customer accounts, after a scandal linked to the threatened closure of Nigel Farage’s bank accounts.

The Financial Conduct Authority (FCA) will write to more than 20 of the UK’s largest lenders on Wednesday asking them to confirm how many customer accounts have recently been closed, suspended or denied, and explain the reasons why those services have been blocked.

It comes a week after the chancellor, Jeremy Hunt, called on the FCA to accelerate an investigation into whether lenders have been “debanking” customers over their “lawfully held political beliefs” on a widespread scale.

UK banks will have just over two weeks to gather the data, which will cover personal and business customers, including political parties. Lenders will also be forced to reveal how many complaints they have fielded from barred customers.

Banks will have to submit their responses to the FCA by 25 August. The FCA is expected to publish its analysis by mid-September.

A Treasury spokesperson welcomed the move, and said ministers would determine whether further action was needed once the results were published.

The political storm over so-called debanking of customers was originally sparked by former Ukip leader Nigel Farage, who launched a public campaign after the private bank Coutts decided to shut his accounts.

Farage obtained documents from Coutts showing that, while he had been below the bank’s “commercial criteria” for some time – referring to its requirement to hold £1m in investments or loans, or £3m in savings – the decision to shut his accounts was also based on concerns that his “xenophobic, chauvinistic and racist views” posed a risk to its reputation.

Banks are not allowed to shut accounts or deny services because of customers’ political views or beliefs.

The scandal led to the resignation of Alison Rose, the chief executive of its owner, NatWest, after she admitted being the source of a BBC story suggesting his account was closed for commercial reasons alone. The chief executive of Coutts, Peter Flavel, was asked to leave over the mishandling of the situation days later.

Farage said last week that Coutts’ newly installed boss had since offered to keep his accounts open, though the former Ukip leader did not immediately confirm whether he had accepted. NatWest has declined to comment.

The saga has also given life to separate concerns that UK politicians are denied services or face excessive scrutiny, since they are categorised as politically exposed persons (PEPs). Regulations currently require banks to conduct additional checks on PEPs, to protect against corruption and financial crime.

The matter gained further traction after digital bank Monzo closed the account for the political party run by anti-Brexit campaigner Gina Miller.

Monzo said it was a matter of policy, since it does not accept any political parties. The lender said that the account was opened erroneously as it was not categorised appropriately in the application. The FCA is conducting a separate review into the PEP regime.

The FCA declined to comment.

 

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