United Kingdom: do banks close their clients’ accounts due to political opinions?

There is no evidence so far that the british banks may have been closing accounts because of their clients’ political views, although closer scrutiny is needed, the company said Tuesday. Financial Conduct Authority (FCA).

British Chancellor of the Exchequer Jeremy Hunt last month called on the FCA to urgently investigate bank account cancellations and suggested fining lenders found to have broken the law.

The practice, known as “debanking”became a political issue after former Brexit party leader Nigel Farage said his account at private bank Coutts, part of NatWest, was closed because of his political views.

An internal bank document later submitted by Farage showed the decision was made in part based on his views, along with commercial considerations.

The controversy over the closure of the accounts led to the departure of NatWest CEO Alison Rose and Coutts CEO Peter Flavel.

The FCA said on Tuesday it examined data from 34 banks and firms, focusing on July 2022 to June 2023, but the speed of its investigations meant there were some gaps, limitations and inconsistencies in the information provided.

It was not possible to present a reliable initial set of conclusions about the groups most likely to be affected by account deregistrations, suspensions and cancellations.

“Accordingly, the information we have received so far does not suggest that accounts have been closed due to the legally expressed beliefs or political opinions of the account holders.””the FCA noted in a report.

“By far the most common reasons providers gave for rejecting, suspending or terminating an account were that it was inactive or that there was concern about financial crime.”

The FCA said it will continue working with companies in the coming months “atypical”, particularly with high rates of account rejections, to verify data and better understand the reasons behind, for example, account closures due to reputational risk.

British Financial Services Minister Andrew Griffith said that freedom of expression is a fundamental human right and took note of the FCA’s initial report.

“It is clear that more needs to be done to validate banks’ submissions and ensure that the FCA has thoroughly monitored the prospects of unbanked customers.”Griffith said.

An independent review commissioned by NatWest is specifically examining Farage, who rejected the FCA’s findings.

“The FCA says it finds no evidence that politicians have been ‘unbanned’ for their political opinions. This new report is a slander and a joke. If we don’t have a proper regulator, what hope is there for our banking sector?” Farage published on the social network X.

Source: Reuters