The Financial Conduct Authority to Investigate Unlawful Bank Closures
The Financial Conduct Authority (FCA) has pledged to investigate the issue of unlawful bank closures following concerns raised by Chancellor Jeremy Hunt. Hunt has warned that this practice could be “widespread” and has called on banks to provide affected customers with clear explanations for the termination of their payment accounts. The FCA has been urged to increase transparency and reassure the public.
Unexplained Account Closures
Sky News has spoken to several individuals and organizations that have experienced account closures, commonly referred to as “de-banking.” None of them were given reasons for the closures. Anas Altikriti, a critic of Middle Eastern governments and the founder of The Cordoba Foundation, a UK-based research and advisory group, believes his political views have led to his account being closed six times in the past decade. Altikriti compares a bank account to a water supply, stating that it is an essential service that should not be denied based on political views.
Altikriti recently tweeted about his history of being de-banked and discovered that his Barclays accounts were mysteriously overdrawn by £1 million. Barclays Bank has promised to investigate the matter and provide a response by Tuesday.
Disproportionate Impact on Specific Communities
The Muslim Council of Britain has expressed concerns that Muslims could be disproportionately affected by these account closures. Miqdaad Versi, the assistant secretary general of the council, explains that many individuals who have been de-banked have been active in issues related to Islam and Muslims, such as pro-Palestinian activism or involvement in their local mosques. The council believes that these activities should not be relevant to banking decisions.
Ayo Banjo, a British lawyer of Black African background, argues that the issue extends beyond the Muslim community. He highlights the concentration of account closures within specific communities and the fact that it affects various demographics within those communities. Banjo claims to encounter a new client facing de-banking every week, with the majority of closures affecting the black, British-Nigerian community. He suggests that banks find it cheaper to close accounts rather than thoroughly investigate individual cases, resulting in the financial exclusion of entire communities.
Legal Protections Against Discrimination
Regulation 18 of the Payments Accounts Regulations makes it illegal to de-bank individuals based on their religion, race, or any other ground referred to in Article 21 of the EU Charter of Fundamental Rights. Chancellor Jeremy Hunt emphasizes that being de-banked is a threat to the right to express opinions. The FCA has the authority to impose significant fines on banks if it finds evidence of widespread de-banking practices. Hunt has called on the FCA to investigate both individual and business de-banking cases.
The FCA plans to request data from the largest banks and building societies regarding the number of account terminations and the reasons behind them. This information will be used as part of the investigation into the issue. The FCA is expected to provide an initial assessment to the chancellor by mid-September.
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