The resignation of NatWest boss Dame Alison Rose in the wake of the Nigel Farage account closure row has intensified pressure on UK lenders amid concerns people are being denied banking services because of their political views.
Ministers are pressing ahead with accelerated reforms to give customers more rights on so-called de-banking.
But what has led to the debate, what are the current rules and what is changing? The PA news agency takes a look.
– What has happened?
In summary, former Ukip leader Nigel Farage sparked a row over the current UK banking rules after he said his account with private bank Coutts was shut because it disagreed with his political views.
Ministers, politicians and banking experts have weighed in on the debate, which brought to light difficult questions about freedom of expression.
It resulted in the Treasury introducing new rules for banks and emphasising that their role is to “serve customers well and fairly – not to tell them how or what to think”.
The row also culminated in the resignation of Dame Alison Rose, the chief executive of NatWest Group, which owns Coutts.
– Why did Dame Alison resign?
The exit of NatWest’s boss was more to do with a breach of confidentiality.
Dame Alison admitted making a “serious error of judgement” in giving inaccurate information to a BBC journalist.
She had suggested Coutts’s decision to close Mr Farage’s account was because he fell under the financial threshold required to hold account, rather than because his values did not align with the bank.
She faced mounting pressure to resign over concerns she breached privacy and confidentiality rules in discussing Mr Farage’s relationship with the bank.
– Are banks allowed to shut people’s bank accounts?
Yes. UK banks can cut ties with a customer if they think that person poses a risk to their reputation as a business.
They have to give notice before doing so unless there are exceptional circumstances such as if financial crime or fraud is detected.
There are also rules around so-called politically exposed persons (PEPs), which apply to those who hold public office in the UK or overseas, or their family members, meaning financial firms can treat their accounts with extra due diligence.
The financial regulator is currently looking into whether PEPs are treated too rigorously by banks amid concerns many British politicians are denied accounts.
– Is this going to change?
The Treasury last week announced new rules for the UK banking sector which it said will help protect freedom of expression for people accessing banking services.
Banks and building societies will have to spell out why they are shutting a person’s bank account – unless there are suspected links to criminal activity. Previously they did not have to provide a rationale for doing so.
The Government said this will make it easier for customers to lodge a complaint with the Financial Ombudsman Service if they think it is unfair.
It also extended the notice period from 30 days to 90 days, which is supposed to give people more time to appeal the decision or look for a replacement bank.
– Is this a good thing for everyone?
The Government thinks the changes will help protect Britons’ lawful right to freedom of expression because it clamps down on the risk people could be denied crucial banking services because of their personal or political beliefs.
Furthermore, it insists the changes will not interfere with banks’ commitment to stop criminal activity or fraud.
But some experts say firms will still have to think carefully about serving a customer who could tarnish their reputation or lose them money.
That right to turn someone down, or cut ties with them, has not gone away.
– What can customers do if they believe their account has been wrongly closed?
Before the new rules came into effect, Nigel Farage used what is known as a subject access request (SAR) to access Coutts documents detailing the reasoning behind his account closure, which he said showed his views “do not align with our values”.
Anyone is entitled to access their personal data through an SAR. People can write an email with “subject access request” as the subject line and outline a list of what personal data they want to see.
An organisation should respond within a month.
If they do not, or a person is unhappy with the response, it is possible to complain to the company or the Information Commissioner’s Office.
