The report covers initial findings from an FCA investigation sparked by a row between former UKIP leader, Nigel Farage, and his bank, Coutts, after the institutions closed his account earlier this year.

After Farage went public with his claim that the bank decided to shut his account over his political views, and other public figures also voiced similar concerns, the Chancellor ordered a probe into ‘debanking’ to better understand banks’ treatment of ‘politically exposed persons’ (PEPs).

The investigation gathered data from 34 UK firms including banks, building societies, payment institutions, and electronic money institutions. The data compiled information from July 2022-June 2023, and included data submitted by the institutions around the:

• number of accounts terminated
• number of accounts suspended
• number and type of consumers declined accounts
• reasons for these decisions and
• complaints received on this issue

While all 34 firms responded to the FCA’s data request, during a press briefing on the report, FCA representatives went to great pains to state that the results were supplied quickly and that the data collected presented limitations. For instance, some firms could only provide data at an account level rather than for individual customers. The report reads: “we do not believe we can currently accurately use aggregate figures or averages.”

Across personal and business accounts, there were four cases and an additional four complaints reported to the FCA by firms with ‘expression of political or any other opinions’ as the reason for the account closure or complaint.

When the FCA followed up directly with firms on these four cases, further information showed that the primary reason for action was not the ‘expression of political or any other opinions’.
For the majority of these cases it was, in fact, customer behaviour that led to the closure or complaint, such as racist language directed at staff.

The report states that as a result, “the information we have received so far does not suggest that accounts have been closed because of the political beliefs or views lawfully expressed by account holders. In addition to providing data, 8 firms told us they do not do this. However, we will be doing further analysis and supervisory work to be sure of this.”

The FCA was cautious to note that the data used in this report was offered by the 34 firms, rather than as a result of an in-depth investigation by the regulator. During the press briefing, FCA spokespeople also commented that the regulator needed to go back and validate the information it collected in the process of creating the report.

The FCA announced that it is also working on a specific piece of work, looking at PEPs which is more closely focused on the treatment of politicians, rather than people with political views, lawfully expressed.

Farage responded to the FCA’s report via X (formerly Twitter), stating: “The FCA says it finds no evidence of politicians being 'de-banked' over political views. This new report is a whitewash and a joke. If we don't have a regulator that is fit for purpose, what hope is there for our banking industry?"

Following the Farage scandal, Coutts boss Peter Flavel resigned, as did NatWest chief executive Dame Alison Rose.

Nikhil Rathi, FCA Chief Executive, commented: “While no bank, building society or payment firm reported to us that they had closed accounts primarily due to someone’s political views, further work is needed for us to be sure. As we undertake that work, the time is also right for a debate on how we balance access to bank accounts with the threat of financial crime, as well as firms’ reasonable risk and commercial appetites. An important question for policy makers is whether all individuals, businesses and organisations should have the right to an account, as is the case in some other countries.

A press release shared by the watchdog explained that the FCA’s further work will include:
• Further follow up to provide assurance of the accuracy of the data reported to us, concentrating particularly on outlier firms.
• Additional supervisory work to be sure of firms’ conclusions on accounts closed for political reasons and closer analysis of accounts closed for reasons of reputational risk.
• Further review of declined applications for and terminations of basic bank accounts.
• Further research into the reasons why 1.1m people in the UK are unbanked and the characteristics of this population.
• A financial inclusion sprint in Q1 2024 focussed on improving consumer access to financial services.