Banks told to stay out of politics

The Coutts-Farage furore is developing into a much bigger scandal, shining a light on the growing trend of debanking which has forced the closure of thousands of customer accounts for political and other reasons.

Nigel Farage, whose account was closed by Coutts because his “values” supposedly did not align with those of the bank, has promised to campaign on behalf of all those who have had their accounts closed by high street banks over the last few years. He also said that the whole board of NatWest should resign following the sacking of Dame Alison Rose, the chief executive, in the early hours of this morning. 

NatWest shares slumped by as much as 3.8 per cent today – wiping over £850m off the stock market value of the bank – following the overnight sacking of Dame Alison. And NatWest shareholders are now said to be piling pressure on Sir Howard Davies, the bank’s chairman, to follow suit for voicing full confidence in Rose on Tuesday, even after she admitted to discussing Farage’s private banking arrangements with BBC business editor Simon Jack, in breach of client confidentiality.

Yet it’s not just NatWest shares taking a hit. Following Farage’s call today for “cultural change” across the wider banking industry, shares in Lloyds Banking Group dropped by 2.7 per cent while Barclays was down by 1.8 per cent. 

Andrew Griffith, the City minister, also met with top bank bosses today, to convey the message: “In a democracy that relies upon freedom of thought”, it is “not the job of banks to tell us what to think or what political party we should support.”

While Rose’s leak to the BBC raised the additionally troubling question of a breach of customer confidentiality – which may be a criminal offence –  Farage’s account closure is far from a standalone case. 

Almost 10,000 people have joined a Facebook group called “NatWest closed down my account” many of whom are failing in their attempts to find out why. 

Earlier this month, Professor Lesley Sawers, 64, the Equalities and Human Rights commissioner for Scotland, received a letter from RBS saying it would be ceasing its “banking relationship” with her after 32 years, and was unable to “provide any further information in relation to our decision-making.” 

Even Britain’s chancellor, Jeremy Hunt, recently revealed that he had been denied an account by online bank Monzo. 

And Craig Beaumont, chief of external affairs at the Federation of Small Businesses, says he has seen “a steady rise in small businesses losing their bank accounts over the past three years, often with little notice and no explanation.”

UK banks will be keen to point out that transparency isn’t always possible if they are to comply with anti-money laundering regulations: forcing lenders to disclose why they’re closing an account could tip off suspects that they could be subject to a criminal investigation. 

But cynics would argue that this has become a convenient law for them to hide behind their ideologically motivated decisions. 

Griffith is urging banks to provide at least 90 days’ notice of account termination and to give customers a “clear understanding” of the reason for closure, unless providing one would be unlawful.

That said, a lack of transparency or notice is only half the problem for those having their accounts terminated. 

If banks were more forthcoming in offering an explanation – even, let’s imagine, daring to admit that the account holder’s views, were, much like those of Farage, “at odds with our position as an inclusive organisation” – what next? Should there be a right for customers to appeal?

At the moment, decisions aren’t easily appealable – not least because lacking a banking facility rather restricts a person’s ability to bring a legal challenge.

Write to us with your comments to be considered for publication at letters@reaction.life