PEP talk: City minister urges FCA to review bank account closures after Farage claims
Andrew Griffith has called on the financial regulator to ensure bank accounts of prominent public figures – PEPs – are not closed due to fears about political exposure.
The City minister tweeted a letter to the Financial Conduct Authority (FCA) calling on the body to speed up its investigation into politically exposed persons (PEPs) account closures.
“Banks should not be closing individuals’ accounts solely due to their status as a PEP,” Griffith said.
The Financial Services and Markets Bill, which passed into law last week, required the FCA to review its guidance on the issue.
PEPs are individuals in prominent public positions. Financial institutions have to conduct stricter checks on PEPs, who are deemed more likely to be involved in corruption or bribery.
‘Unduly burden’
While Griffith accepted that stricter checks were necessary, he argued this shouldn’t prevent PEPs from basic banking services.
“It is crucial an appropriate balance is struck and that these measures do not unduly burden or prevent democratically elected individuals… from access to essential banking services”.
The letter comes amid allegations that banks are ‘debanking’ certain customers because of their political views.
Former UKIP leader and Brexiteer Nigel Farage said he had been rejected by seven banks for a basic bank account, suggesting he was being rejected because he was a PEP.
‘Political decision’
However, it later was claimed by the BBC that Farage, who had banked with private firm Coutts, had fallen below the minimum account threshold of £1m.
The broadcaster’s business editor Simon Jack tweeted that Farage had been offered an account with NatWest which is also owned by Coutts. But Farage hit back, sharing messages he said were from other Coutts customers claiming they also did not meet the £1m threshold.
“Coutts will not admit that this is a political decision… dishonest in the extreme,” he wrote.
A No10 spokesman said the government had passed a law requiring the FCA to review banks’ approach to PEPs so “we can strike the right balance between a customer’s right to free speech and banks’ [right] to manage commercial risks”.
He added: “We’ve asked the FCA to review whether financial institutions are meeting its guidance on politically exposed persons and whether it needs to be updated.”