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In what can only be described as an egregious act, I have been deplatformed by Coutts. It seems that my unconventional opinions and behavior have led to this decision.
Yes, I firmly believe that “Selling Sunset” is a fantastic TV show, despite the pressure from the “Succession”-obsessed masses. Yes, I have been known to eat refried beans straight from the tin. Yes, I believe that swimming in the sea is overrated. But does that really matter? I’ll stay on my towel, thank you. We must preserve the freedom of the beach.
To be fair, I never had an account with what was once known as “the Queen’s bank.” However, a quick look at their website confirms that I have been marginalized. This marginalization can only be attributed to my views and not to my lack of the required £3mn in savings or £1mn in investments and borrowings.
At least I’m in good company. Nigel Farage, the former leader of the Brexit party, had his account with Coutts closed and was offered a standard NatWest account instead (as NatWest owns Coutts), apparently due to not meeting the financial criteria. Farage believes that he has been blacklisted for his views and being classified as a “politically exposed person” (PEP).
Setting aside the paranoia of the cultural wars, there are some peculiarities regarding the rules on PEPs.
Money laundering regulations require banks to handle PEPs with caution due to their perceived higher risk of bribery and corruption. The European rules, adopted into UK law in 2017, were stricter than international standards, necessitating enhanced due diligence for both foreign and domestic PEPs. In other markets, domestic politicians typically receive more lenient treatment, with only those flagged as high-risk undergoing enhanced screening.
The UK Financial Conduct Authority implemented guidelines to promote greater flexibility and specified that only individuals in “truly prominent positions” should be considered as PEPs. However, some banks adopt a cautious approach, strictly adhering to the letter of the law, especially considering the significant fines imposed on lenders for inadequate anti-money laundering controls.
Even Chancellor Jeremy Hunt is not immune. He claims that Monzo, the online bank, refused to open an account for him (the bank declined to comment).
We can’t entirely blame the banks. Under the senior managers regime, someone must take responsibility for what one financial institution describes as an “incredibly delicate judgment.” Additionally, the government has provided little assistance by not furnishing a list of domestic PEPs, promoting higher standards in public life, or allowing banks to rely on information from Companies House.
These factors increase the cost of conducting checks, resulting in a reluctance to onboard PEP accounts, which encompass politicians’ families and close associates. Furthermore, banks have limited legal leeway when rejecting PEP accounts.
The situation could deteriorate further. Recent financial services legislation necessitates a regulator review of its guidelines without changing the underlying law to align with international standards. Additionally, the economic crime bill introduces criminal corporate liability for failures to prevent money laundering, among other offenses.
A current account is an essential service, and there is a growing sentiment that it should not be withdrawn or denied without substantial justification.
Many of the 1.3 million UK expats living in the EU had their UK accounts closed post-Brexit due to the costs and difficulties associated with operating in European markets. Other groups struggle to access basic banking services due to documentation requirements and banks’ reluctance to onboard accounts deemed higher risk or higher cost.
There are still 1.2 million adults in the UK without a bank account, with a higher likelihood of being young, from an ethnic minority, unemployed, or working in the gig economy. The proportion of “unbanked” individuals is 12 times higher in the most deprived areas compared to the least. Requiring major lenders to offer “basic bank accounts” has proven helpful, with 7 million of these accounts currently available, although they lack overdraft facilities and sometimes have limited access to other products like savings. Banks have had mixed success in transitioning these customers to mainstream alternatives.
All of this undermines the notion that UK banks, as Nigel Farage claims, are acting as woke activists. However, the barriers to accessing bank accounts deserve attention, regardless of who in society is affected.
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