UK Finance Ministry Proposes Rules Against ‘Unfair Bank Account Closures’

The United Kingdom’s economic and finance ministry, HM Treasury, is proposing rules for banks to combat “unfair bank account closures.”

The proposed rules are meant to protect freedom of expression, HM Treasury said in a Thursday (July 20) press release.

“The government has stepped in to address fears that banks are terminating accounts because they disagree with someone’s political beliefs,” the ministry said in the release.

Under the proposed rules, banks will have to give customers a 90-day notice period, allowing them more time to challenge the decision or move to another bank, according to the press release.

Banks will also be required to explain why they are terminating a bank account — a change that is meant to help customers better understand and attempt to overturn the decision, the release said.

“These changes will boost the rights of customers — providing real transparency, time to appeal and making it a much fairer playing field,” Economic Secretary to the Treasury Andrew Griffith said in the release.

The proposed rules come after PayPal temporarily suspended several accounts last year and a subsequent call for evidence found that changes were needed to balance providers’ rights to manage commercial risk with customers’ rights, according to the release.

This news also comes on the same day that NatWest Group CEO Alison Rose issued a statement on a review of the bank’s account closure process after media reports of the bank’s Wealth Reputation Risk Committee closing the accounts of Brexit leader Nigel Farage.

“I fully understand the public concern that the processes for bank account closure are not sufficiently transparent,” Rose said in the statement. “Customers have a right to expect their bank to make consistent decisions against publicly available criteria. Those decisions should also be communicated clearly and openly with them, within the constraints imposed by the law.”

Speaking of the proposed new rules, Griffith said in the HM Treasury press release: “Freedom of speech is a cornerstone of our democracy, and it must be respected by all institutions. Banks occupy a privileged place in society, and it is right that we fairly balance the rights of banks to act in their commercial interest, with the right for everyone to express themselves freely.”