UK watchdog steps into row over ‘debanking’ of Nigel Farage
Britain’s financial watchdog has stepped into a row over the closure of former Brexit Party leader Nigel Farage’s bank accounts, after Farage claimed NatWest’s NWG.L private bank Coutts had sought to cut him off on political grounds.
British banks are in the spotlight as the UK government has begun looking into concerns some have allegedly blacklisted certain customers over their politics.
Farage said on Tuesday that he had obtained a 40-page document from Coutts after filing a “subject access request” with the bank, to learn more about its rationale for proposing to shut the accounts.
NatWest’s treatment of Farage drew criticism from several government ministers on Wednesday, while prime minister Rishi Sunak said the government was tightening rules around account closures.
The Financial Conduct Authority is talking to NatWest about the handling of Farage’s accounts, the regulator’s CEO Nikhil Rathi told lawmakers, adding existing rules made clear banks should not discriminate on the basis of political views.
Coutts said in an updated statement on Wednesday that it was not its policy to close customer accounts solely on the basis of legally held political and personal views.
Coutts reiterated that account closures involved a number of factors “including commercial viability, reputational considerations, and legal and regulatory requirements.” Coutts said it could not comment on the detail of the case due to client confidentiality.
Prime Minister Rishi Sunak told parliament on Wednesday that “it wouldn’t be right” for banks to deny services to those exercising the right to lawful free speech.
Under planned reforms, banks will have to give customers three-months’ notice of account closures, Sky News reported.
Financial services minister Andrew Griffith said on Twitter that while businesses had a right to protect against reputational risks, banks in a democracy had a “duty not to ‘debank’ because you disagree with someone’s views.”
Reuters has not independently verified the documents cited by Farage.
‘REPUTATIONAL RISK’
The Mail Online on Wednesday published what it said were the full documents cited by Farage, which showed that Coutts’ wealth reputational risk committee had decided to cut ties with Farage after a mortgage he had taken out had expired.
The document, as published by the Mail Online, said the bank was ending the relationship “on commercial grounds”, and referred to the extra cost of managing the accounts of high profile individuals.
But the document, first reported by The Daily Telegraph, also cited at length other “risk factors including… controversial public statements which were felt to conflict with the bank’s purpose”.
Farage said on Twitter that “Brexit”, “Russia” and “Donald Trump” were mentioned multiple times in the documents he obtained and that Coutts had said “the client’s [Farage’s] financial position is now sufficient to retain on a commercial basis”.
Farage told Reuters on Wednesday the issue “raises very broad questions about our banks and how deeply political they have become.”
“A lot of people in prominent political roles will be scratching their heads and thinking will I be next?,” he said.
Farage previously said he believed he was deemed a “politically exposed person” (PEP), meaning banks have to apply additional scrutiny to accounts.
Reuters previously reported that Coutts was closing Farage’s accounts mainly for commercial reasons, citing a source familiar with the matter.
The BBC previously reported Farage had fallen below the financial threshold required to be a customer of the private bank – something Farage said he had had no knowledge of.