The City watchdog has said it will question banks over the number of customer terminations, following a letter by Jeremy Hunt that demanded to know what the Financial Conduct Authority was doing over the debanking debacle.
In a letter to the regulator yesterday (August 3), chancellor Hunt highlighted that the FCA has the right to fine banks very large sums of money for the practice of de-banking.
His letter, widely circulated on social media, asked if the practice was widespread and what the FCA was doing about it.
“Free speech is a fundamental human right. You can agree or disagree with Nigel Farage, but everyone must be able to express their opinions,” Hunt wrote in his letter (see tweet, below).
Hunt stated that, in today’s society, one needs a bank account function and so a threat to be de-banked was "a threat to express your opinions".
“We have regulations - Regulation 18 of the Payments Accounts Regulations - that ban this so called de-banking of people for their political views,” he added.
Having your bank account removed because of your political views is very clearly against the law - it shouldn’t be happening. I’ve written to the financial regulator today. They're going to urgently investigate how widespread this practice is, and put a stop to it. pic.twitter.com/TFcCJoocn9
— Jeremy Hunt (@Jeremy_Hunt) August 3, 2023
But the FCA's chief executive, Nikhil Rathi, said the regulator was already "preparing a data exercise" to assess the de-banking situation.
Rathi told FTAdviser: "We had been preparing a data exercise to focus on banks and building societies providing payment accounts to consumers and accounts to businesses.
"In the coming months, we will ask the largest banks and building societies to provide us with the number of account terminations and the reasons for these; number of complaints about terminations, and their outcomes.
"We will also request data on the number of accounts opened; the volume of new applications refused and any relevant complaints data and information about policies and procedures."
He added that the authority will provide an initial assessment by mid-September.
Rathi additionally pointed out that the FCA does not adjudicate individual cases and that there are protections in place for individual consumers who can complain to their bank.
Pushing a cultural shift?
This inquiry comes after the closure of Nigel Farage’s Coutts bank account made headlines.
In July, several high-profile Conservatives and ex-finance industry lenders wrote to the chancellor, expressing worries that the FCA may have unintentionally fostered the banking culture that led to the loss of Farage’s Coutts account.
They said: “The FCA has actively been pushing an approach that imposes a cultural shift and diversification of thought in banks and other financial firms.”
Earlier this week, PanaceaAdviser.com chief executive Derek Bradley, wrote for FTAdviser about the subject.
Bradley asked if de-banking was an unintended consequence of the interpretation of incoming environmental, social and governance directives from the FCA.
tom.dunstan@ft.com
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