Ministers are drawing up plans to extend new bank account closure rules to businesses as the Government steps up its crackdown on lenders who block accounts because of customers’ personal views.
The Telegraph understands Treasury officials are weighing proposals that will order banks to give some business account holders at least 90 days’ notice of termination and a clear explanation of why accounts are closed.
The new measures announced last week by Andrew Griffith, the City minister, only cover personal bank accounts.
However, it is understood that the Government is exploring how it could also extend the new rules to cover bank accounts for small businesses amid fears that some companies have also been hit with unfair closures.
Tina McKenzie, head of policy at the Federation of Small Businesses (FSB), said the trade body had been told about “a number of small business owners who have been left both baffled, and in some cases in considerable business difficulty, by having their bank account closed at short notice and without clear explanation”.
She added: “It’s clear that there is a need both for more transparency, and for a way of quantifying how many small business customers are being affected.”
Speaking on GB news Mr Griffiths said he had a “similar case” in his own constituency, involving a “business that had been with the same institution for a quarter of a century and then suddenly gets a letter out of the blue”.
He added: “That is one reason why a big focus of what we’re trying to do is bring the oxygen and transparency to how these decisions are made and on what grounds, and I think whether that’s customers or businesses, that’s a good thing to aim for.”
Last week, Mr Griffith hauled bank chiefs into the Treasury to demand that banks respect free speech following a row between Nigel Farage and NatWest over the closure of the Brexiteer’s accounts.
After the meeting, the Treasury said the bank bosses “acknowledged that recent events had impacted upon public trust for the whole sector and expressed their clear commitment to government policy on account closure and to act quickly to restore confidence”.
They also committed to “the principle of non-discrimination based on lawful freedom of expression”, to quickly improving their policies in this area and doing so before the Government’s new policies are enacted “where possible to do so”.
It comes after The Telegraph revealed that Mr Farage’s bank accounts were closed down after Coutts, which NatWest owns, decided that his views “do not align with our values”.
A reputational risk committee decided to shut Mr Farage’s personal and business accounts at Coutts after considering a dossier that concluded that his views were not “compatible with Coutts”.