The City regulator has found no evidence that banks are closing accounts on the basis of customers’ personal views, prompting a furious response from Nigel Farage.
The Financial Conduct Authority (FCA) had been investigating the issue covering the 12 months to June in the wake of the so-called de-banking row that engulfed NatWest Group in relation to its handling of accounts, in its Coutts arm, belonging to former UKIP leader Mr Farage.
The watchdog brought forward the publication of its findings, covering practices at 34 lenders, after an apparent leak to the Financial Times.
The FCA said the evidence it had gathered “suggests that no firm closed an account between July 2022 and June 2023 primarily because of a customer’s political views”.
It added that it planned to work further with banks, building societies and payment companies to verify the data they supplied and better understand why and when they close accounts due to reputational risk.
Mr Farage reacted by claiming the FCA was part of the problem.
“The FCA says it finds no evidence of politicians being ‘de-banked’ over political views. This new report is a whitewash and a joke,” he wrote on X (formerly known as Twitter).
“If we don’t have a regulator that is fit for purpose, what hope is there for our banking industry?”
The probe was ordered by the chancellor who warned banks last month that they faced “very large” fines if they closed customer accounts based on their political opinions.
The Treasury has also unveiled a package of reforms designed to force banks to be more transparent about account closures.
The FCA’s report, however, would seem to suggest the government has jumped the gun.
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Farage calls on NatWest board ‘to go’
Coutts boss Peter Flavel resigned, as did NatWest chief executive Dame Alison Rose after she admitted being the source behind an incorrect BBC story about the row.
It came after Mr Farage obtained a 40-page dossier from Coutts which suggested the closure of his accounts was taken partly because his views did not align with its “values”, including his position on LGBTQ+ rights and friendship with former US president Donald Trump.
1.1 million UK adults without bank account
The FCA insisted its work in this area was not done.
The regulator’s chief executive Nikhil Rathi said: “While no bank, building society or payment firm reported to us that they had closed accounts primarily due to someone’s political views, further work is needed for us to be sure.”
Read more:
Farage and NatWest: A timeline of what happened
Key points from Coutts’ dossier on Farage
The FCA said it will also examine why there are 1.1 million adults in the UK who do not have a bank account.
Mr Rathi added: “As we undertake that work, the time is also right for a debate on how we balance access to bank accounts with the threat of financial crime, as well as firms’ reasonable risk and commercial appetites.
“An important question for policymakers is whether all individuals, businesses and organisations should have the right to an account, as is the case in some other countries.
“What’s more, international comparisons suggest robust digital identities could play an important role not only in countering financial crime but also in aiding financial inclusion.”
Economic secretary to the Treasury Andrew Griffith said of the FCA’s report: “Free speech is a fundamental human right. No ifs, no buts – everyone must be able to express their lawful opinions without fear of losing the vital access to a bank account.
“We have already acted to force banks to explain and delay any decision to close an account to protect freedom of expression – meaning customers will have a 90 day notice period and a clear explanation for any account closure.
“That will be backed up in legislation this year.
“We note the initial report of the FCA. Clearly there is more to be done to validate the submissions by banks and to ensure that the FCA have thoroughly followed up de-banked customer perspectives.”
