Jeremy Hunt has asked the financial regulator to urgently investigate whether banks are barring politicians from accounts on a “widespread” basis, after Nigel Farage had his account shut down by private bank Coutts.
The chancellor said everyone must be able to express their opinions and people must have access to banking.
He wrote to Nikhil Rathi, chief executive of the Financial Conduct Authority, asking for an inquiry into whether the practice of “debanking” is common and asking for it to be ended.
“We have regulations – Regulation 18 of the Payments Accounts Regulations – that ban this so called debanking of people for their political views,” Hunt said.
“I’ve written to the regulator – the Financial Conduct Authority – they have the right to fine banks very large sums of money if they find this practice is widespread. I want to know if it is, and I want to know what they are doing about it.”
In his reply, the FCA chief said it was unclear how widespread a practice it was for banks to terminate accounts for unlawful reasons but said the regulator had been looking at the data.
He said the FCA was asking banks to provide the number of terminations of accounts and reasons for them as well as information on new account applications refused and would provide an update by mid-September.
“As the regulator, it is important that we understand the scale of the issue and the drivers behind a reported increase in account terminations,” Rathi said.
The FCA said there had been an increase in account terminations but that may reflect compliance with anti-money laundering legislation.
The regulator will separately look at the politically exposed person regime, which requires banks to apply enhanced scrutiny to the transactions of politicians to make sure banks are taking a proportionate approach.
The decision of Coutts to close Farage’s account caused a political furore that led to the resignation of Alison Rose, the chief executive of its owner, NatWest, after she admitted being the source of a BBC story suggesting his account was closed for commercial reasons.
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The BBC withdrew the claim after Farage obtained documents showing that, while the former Ukip leader had for some time been below its commercial criteria – requiring customers to have £3m in savings or £1m in loans or investments – it was ultimately concerned that his alleged “xenophobic, chauvinistic and racist views” posed a risk to the bank’s reputation.
The chief executive of Coutts, Peter Flavel, was asked to leave by mutual consent over the mishandling of the situation.
Farage has been applying pressure on the government since then to take action, with a number of other politicians also revealing they had been debanked, including some on the left.
