FCA launches ‘debanking’ inquiry

The Financial Conduct Authority (FCA) is launching an inquiry to see whether MPs and other ‘politically exposed persons’ (PEPs) have been impacted by ‘debanking’.

The move follows the scandal surrounding the closure of Nigel Farage’s bank accounts that led to the resignation of NatWest’s and Coutts’ CEOs, Alison Rose and Peter Flavel.

A few weeks ago the banks came under fire over the closure of the former Ukip leader’s private bank account with Coutts.

The FCA is now planning to send letters to PEPs to see whether this is a widespread issue affecting MPs and others in politics.

“We are reviewing how financial services firms have applied the politically exposed persons regime and whether any changes are needed for UK PEPs,” the FCA said.

“We are keen to hear directly from UK PEPs on their experiences, including any problems they have encountered – so we’re proactively reaching out to parliamentarians and other UK PEPs at an early stage.” 

The City watchdog will be reviewing the extent to which politically focused ‘debanking’ causes issues for those looking to set up a bank account.

Chancellor Exchequer Jeremy Hunt, who called for the FCA to urgently investigate whether politicians are being barred from accounts, has previously said he was refused a Monzo bank account.

He called on the FCA to “urgently” investigate how widespread the practice is, noting its right to fine banks “very large of money” if they find it is prevalent.

The FCA said it would publish the full terms of reference to be reviewed in September and is set to release its findings by next June.