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Chancellor Jeremy Hunt has told Britain’s financial regulator to find out urgently how many bank customers have been blacklisted for their political views and to hit lenders with heavy fines if the practice is widespread.
Hunt said the issue, exposed by former Brexit party leader Nigel Farage, was extremely serious and that “a threat to be de-banked is a threat to your right to express your opinions”.
The chancellor wrote to the Financial Conduct Authority on Thursday, telling it to use its powers to launch an urgent review of the practice of de-banking and to look at its scale, prompting the FCA to announce that a review was already being prepared.
“The Financial Conduct Authority has the right to fine banks very large sums of money if they find this practice is widespread,” Hunt said. “I want to know if it is, and I want to know what they are doing about it.”
Farage shone a spotlight on the issue last month after he revealed that both his business and personal bank accounts had been closed by the elite bank Coutts without explanation.
He later exposed the fact that a central reason for the closure of his accounts was because his political views did “not align” with those of the bank. Alison Rose, the chief executive of NatWest, Coutts’s parent, lost her job in the row that ensued.
Hunt said: “Free speech is a fundamental right. You can agree or disagree with Nigel Farage, but everyone must be able to express their opinions.”
The chancellor said that Regulation 18 of the Payments Accounts Regulations banned the de-banking of people for their political views. Farage has launched a website in which he has encouraged people to tell their stories about the practice.
Hunt’s allies said the FCA had all the power it needed to crack down hard on banks that carried out the practice on a large scale, including hefty fines. The withdrawal of a banking licence would be seen as a “nuclear option”.
“We recognise the increased public concern about payment accounts being closed without fair justification,” FCA chief executive Nikhil Rathi said in a response to the chancellor published on Thursday evening.
Rathi added that the FCA had “been preparing a data exercise” to scope out the issue and would “in the coming month” ask the UK’s largest banks and building societies for data on the number of accounts they have terminated, the reasons for the terminations, the number of related complaints and how those complaints were resolved.
Rathi stressed that there is currently no obligation for banks to provide business accounts, and that introducing such a universal service obligation was a “policy matter” for the government.
“We will contribute to this work through the provision of appropriate data,” he added.
