LONDON, July 19 (Reuters) – Britain’s financial watchdog has entered a dispute over the closure of the bank accounts of former Brexit Party leader Nigel Farage after Farage claimed the NatWest accounts. (NWG.L) the private bank Coutts had tried to isolate him for political reasons.
British banks are in the spotlight as the UK government has begun to look into concerns some have reportedly blacklisted certain customers about their policy.
Farage said Tuesday that he had obtained a 40-page document from Coutts after filing a “subject access request” with the bank, seeking more information about his rationale for proposing to close the accounts.
NatWest’s treatment of Farage drew criticism from several government ministers on Wednesday, with Prime Minister Rishi Sunak saying the government was tightening rules on account closures.
The Financial Conduct Authority is talking to NatWest about the handling of Farage’s accounts, the regulator’s chief executive Nikhil Rathi told lawmakers, adding that existing rules make it clear that banks must not discriminate based on political opinion.
Coutts said in an updated statement Wednesday that it was not his policy to close client accounts solely on the basis of legally held political and personal views.
Coutts reiterated that the account closures involved a number of factors “including business viability, reputational considerations, and legal and regulatory requirements.” Coutts said she could not comment on the details of the case due to client confidentiality.
Prime Minister Rishi Sunak told parliament on Wednesday that it “would not be right” for banks to deny services to those exercising the right to legal freedom of expression.
Under the 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 companies had the right to protect themselves against reputational risk, banks in a democracy had a “duty not to ‘unseat’ 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 expired.
The document, published by Mail Online, said the bank was ending the relationship “for business reasons” and was referring to the additional cost of managing the accounts of high-profile individuals.
But the document, first reported by The Daily Telegraph, also extensively cited other “risk factors including… controversial public statements that were deemed to be in conflict with the purpose of the bank.”
Farage said on Twitter that “Brexit”, “Russia” and “Donald Trump” were mentioned multiple times in the documents he obtained and that Coutts had said that “client’s (Farage’s) financial position is now sufficient to retain commercially.”
Farage told Reuters on Wednesday that the issue “raises very broad questions about our banks and how deeply political they have become.”
“Many people in prominent political roles will scratch their heads and think: am I next?” he said.
Farage previously said he believed he was considered a “politically exposed person” (PEP), which means banks must apply extra scrutiny to accounts.
Reuters previously reported that Coutts was closing Farage’s accounts mainly for business reasons, citing a source familiar with the matter.
The BBC previously reported that Farage had fallen below the financial threshold required to be a client of the private bank, something Farage said he was not aware of.
Reporting by Iain Withers; Additional reporting by Huw Jones and William James; edited by Sinead Cruise, David Evans, Jane Merriman, and Barbara Lewis
Our standards: The Thomson Reuters Trust Principles.
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