On Wednesday, Britain's financial regulator urged financial firms to reassess their policies on account denials and closures, ensuring that vulnerable consumers and entities like charities and pawnbrokers are not disadvantaged. In its latest report, the Financial Conduct Authority (FCA) acknowledged that banks, building societies, and payment firms are striving to assist customers in accessing accounts. The FCA also stated that it has not discovered any instances of accounts being closed due to politically motivated opinions expressed lawfully. However, the FCA has requested that senior executives sign an attestation, personally guaranteeing compliance with the rules and their confidence in such compliance.
Last year, NatWest faced a crisis following a contentious dispute with former Brexit party leader Nigel Farage, who had his accounts closed by the bank's private division, Coutts. This incident ignited political controversy and culminated in the resignation of the bank's CEO, Alison Rose, and Coutts' former head, Peter Flavel. The FCA has also encouraged account providers to extend more support to individuals seeking a bank account but lacking one, reminding them of their obligations to act accordingly. Organizations such as pawnbrokers, charities, and the adult entertainment sector have encountered difficulties in accessing accounts, prompting the FCA to call for firms to establish a clear and well-considered definition of reputational risk.
"We've observed instances of exemplary practice – where account providers facilitate access to essential financial inclusion products – but also areas that require enhancement," noted Sheldon Mills, the FCA's executive director for consumers and competition. "By highlighting both, we aim to foster more uniform outcomes, ensuring people are aware of suitable accounts available to them, receiving increased support for the vulnerable, and not being denied access without just cause."
