Banks have not been closing customer accounts for political reasons, according to the initial findings of an investigation by the UK’s financial regulator published today.
The Financial Conduct Authority (FCA) was tasked with investigating the issue after it was revealed that Natwest-owned Coutts closed Nigel Farage’s bank account partly because of his political views.
But the FCA found that “no firm closed an account between July 2022 and June 2023 primarily because of a customer’s political views.”
There were four account closures where political views were reported to be a factor. After following up on these cases, the FCA said that the decisions were actually related to how those customers behaved towards bank staff.
It found that the most common reasons given for account closures were because an account was inactive or because there were concerns about financial crime.
The FCA said, however, that further work will be undertaken to verify the data, in particular where accounts were closed due to “reputational risk”.
Sarah Pritchard, executive director of markets at the FCA, said that the watchdog would check to ensure these “criteria were not being used too broadly”.
The FCA said it will now direct its attention towards ‘outlier’ banks and building societies, which closed a higher number of accounts than average.
Pritchard stressed that “it is unlawful for a customer to lose access to their bank or building society accounts because of their legally expressed political views”.
However, the FCA’s chief executive Nikhil Rathi highlighted that there is currently no legal right to a payment account in the UK, unlike in some other jurisdictions, which raises “an important question for policy makers”.
“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,” Rathi added.
A UK Finance spokesperson said: “Freedom of expression is vitally important and today’s report from the FCA makes clear that accounts are not being closed because of political beliefs or other lawfully held views.”
Many politicians were sceptical of the FCA’s findings, suggesting that much more work needed to be done on the subject. Nigel Farage said the regulator’s conclusions were “farcical”.
“There are plenty of examples of prominent Brexiteers being debanked. The FCA is part of the problem,” he added.
City minister Andrew Griffith, said: “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.”
Gareth Bacon said the “whole thing looks like a whitewash” suggesting that the Treasury needed to check what actions the FCA had taken to validate submissions from banks.
Nickie Aiken also argued that “if they only took the word of the Banks then I think they need to look again.”