Britain’s financial regulator on Wednesday asked financial firms to review their approach to account denials and closures and ensure vulnerable consumers and organisations such as charities and pawnbrokers aren’t losing out.
In a new report, the Financial Conduct Authority (FCA) said it recognised that banks, building societies and payment firms were trying to support customers to access accounts. The watchdog also said it had also found no evidence of accounts being closed due to lawfully expressed political opinions.
However, it has asked senior leaders to sign an attestation taking personal responsibility for ensuring rules have been complied with and that they are confident of their compliance, the FCA said.
NatWest was plunged into crisis last year after a damaging row with former Brexit party leader Nigel Farage over a decision to close his bank accounts with its private bank Coutts.
The episode sparked a political backlash and ultimately led to the departure of the bank’s CEO Alison Rose, as well as of Coutts’ former boss Peter Flavel.
The FCA also urged account providers to do more to support those who want a bank account but do not have one – and reminded providers that they should act in line with their obligations.
Organisations such as pawnbrokers, charities and the adult entertainment sector had experienced problems accessing accounts and the FCA urged firms to have a clear, properly considered definition of reputational risk.
“We’ve seen examples of really good practice – with account providers helping people access a product vital for financial inclusion – but also areas where there is room for improvement,” said Sheldon Mills, the FCA’s executive director of consumers and competition.
“By sharing both, we want to achieve more consistent outcomes, with people being aware of what accounts there are that might be right for them, more support for the vulnerable and people not being denied access without good reason.”
(Reporting by Kirstin Ridley and Sinead Cruise, Editing by Louise Heavens)