Chancellor Jeremy Hunt has called for an inquiry from the UK’s financial regulator, Financial Conduct Authority, to urgently investigate whether banks are involved in barring politicians from accounts on a widespread basis, known as the ‘debanking’ of politicians.
The Chancellor said that everyone must be able to express their opinion and must also have access to banking, which comes after former UKIP leader, Nigel Farage, having his account shut down by private bank Coutts over his ‘values’, as well as a number of other PEPs (Political Exposed Person).
Hunt wrote to FCA chief executive, Nikhil Rahti, asking for an inquiry into whether the practice of “debanking” is common and for it to be ended, to which they responded stating it was unclear how widespread a practice it was but said the regulator had been looking at the data.
The FCA is asking banks to provide the number of terminated accounts and reasons for them, as well as information on account applications that are refused, and would provide an update by mid-September, as an increase in account terminations have been evidenced, however, this could relate to anti-money laundering legislation.
Encompass Corporation co-founder and CEO, Wayne Johnson, commented: “As the Chancellor calls for an urgent investigation into whether banks are going against regulations by ‘debanking’ for unlawful reasons, this underlines that it is more critical now than ever for financial institutions to utilise technology-driven processes to ensure they are acting based on facts, presented by live, authoritative publicly available data. This will ensure they are not only mitigating risk and keeping up with regulatory demands, but are able to do so most efficiently.
“Banks are navigating an increasingly complex regulatory landscape. Critically, technology exists to establish a customer’s identity, which can provide real-time profiles, generated on demand, to validate and verify a company, while providing a full audit trail. This allows banks to evidence compliance, preserving reputation with a robust Know Your Customer (KYC) process, while also streamlining these processes for optimum business outcomes.”
In Jeremey Hunt’s letter to Nikhil Rathi, chief executive of the Financial Conduct Authority, he wrote: “We have regulations – Regulation 18 of the Payments Accounts Regulations – that ban this so called debanking of people for their political views,” Hunt said.
“I’ve written to the regulator – the Financial Conduct Authority – they have the right to fine banks very large sums of money if they find this practice is widespread. I want to know if it is, and I want to know what they are doing about it.”