Banks face losing their licence if they discriminate against customers based on their lawful political beliefs under plans being drawn up by the Government, according to the Telegraph. Louisa Clarence-Smith has more.
Ministers have ordered officials to start drafting legislation to give banks new free speech duties after it emerged that Coutts bank had closed Nigel Farage’s accounts because his views did not “align” with its “values”.
Andrew Griffith, the Economic Secretary to the Treasury, has asked civil servants to explore adding free speech protections to banking licences, according to Whitehall sources.
The move would mean that any bank which discriminates against a customer because of their political beliefs could have its banking licence revoked.
Separately, payment service providers will be told as soon as Thursday that they must not discriminate against customers on the basis of belief, the Telegraph understands.
The Treasury is preparing to enforce it by strengthening the Financial Conduct Authority’s ‘Principles for Business’. Principle Six, which states that “a firm must pay due regard to the interests of its customers and treat them fairly”, will be updated to refer to political beliefs, insiders said.
It will also say that banks must give three months’ notice of services being terminated and due notice must be given to enable appeals.
The changes are expected to be announced as early as Thursday as part of the Treasury’s response to its payment services regulations review.
It comes after Rishi Sunak vowed to “crack down” on banks removing customers for non-commercial reasons on Wednesday amid a growing backlash against Coutts and its parent company NatWest.
David Davis, Conservative MP for Haltemprice and Howden, branded Coutts’ decision to de-bank Mr Farage as “a thinly veiled political discrimination, a vindictive, irresponsible and undemocratic action”.
He told the Prime Minister in the House of Commons that the banking licence of NatWest should be in jeopardy over its handling of the scandal. He asked Mr. Sunak to order banks to disclose to the Treasury all of the accounts they have shut down for non-commercial reasons.
In response, Mr. Sunak said: “In the short term, having consulted on the payment service regulations, we do intend to crack down on this practice by tightening the rules around account closures.”
The Government began working on reforms for payment service providers earlier this year, after the Telegraph revealed that PayPal, the U.S. payments company, had been accused of shutting down accounts for political motives.