The UK’s top banks on Wednesday agreed to overhaul their handling of account closures and committed to upholding their clients’ “freedom of expression”, as the backlash over NatWest’s treatment of Nigel Farage continued.
Senior executives from Barclays, HSBC, Lloyds, NatWest, Santander and Nationwide, were summoned to a meeting with City minister Andrew Griffith after former UK Independence party leader Nigel Farage claimed his account with NatWest’s private bank Coutts was shut because of his political views.
NatWest chief executive Alison Rose resigned over the debacle early Wednesday morning, after admitting to misleading a BBC journalist about the closure of Farage’s account at its private bank, Coutts. The bank’s chair Howard Davies, who backed Rose on Tuesday, is now facing pressure to step down.
In a statement issued after Wednesday morning’s meeting with banks, the Treasury said attendees “acknowledged that recent events had impacted upon public trust for the whole sector and expressed their clear commitment to government policy on account closure and to act quickly to restore confidence”.
The bankers committed to “the principle of non-discrimination based on lawful freedom of expression” and to swiftly improving their policies around account closures, moving before the government’s new policies are enacted “where possible to do so”.
The government wants banks to give account holders at least 90 days’ notice of terminations versus the current rules of at least 30 days, giving customers a longer time to appeal to the Financial Ombudsman Service or find a new bank. They will also have to clearly explain terminations to customers.
A person familiar with the discussions said banks had been largely supportive of the government’s proposals but had raised concerns about issues such as the need to terminate accounts faster if clients were abusive to bank staff, as well as the trade-off against preventing financial crime if banks cannot move swiftly to shut suspicious accounts. The banks also committed to developing better data on account closures.
Griffith also called for banks to work “at pace” with the Treasury and Financial Conduct Authority on a review of how they should handle politically exposed persons, such as politicians and family members who are at higher risk from bribery and corruption.
One financial analyst told the Financial Times these changes could prove challenging. “How does it work if a bank is being told ‘we’ll rip your arms if you process money for the wrong people’, but also being told ‘there are going to limits on what you can do in terms of de-banking’?” they said.