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Banks will be forced to give customers three months’ notice of account closures and to provide a full explanation of the reasons under reforms that could be unveiled in the coming days.
Sky News has learnt that the Treasury plans to force British lenders to be more transparent with customers amid an escalating freedom of expression row triggered by Coutts’ termination of its relationship with Nigel Farage, the former UK Independence Party leader.
Sources said the proposals, which would require secondary legislation, are likely to be announced in written ministerial statement by Andrew Griffith, economic secretary to the Treasury.
The statement is expected imminently, although one source cautioned that the timetable was yet to be signed off by 10 Downing Street.
Insiders said the Financial Conduct Authority (FCA) would need to amend its rulebook to accommodate the changes, but added that doing so would be neither onerous nor time-consuming.
The requirement for secondary, rather than primary, legislation should also shorten the timetable for implementing the changes, they added.
Bank customers would also retain their right to appeal against their lender’s decision to close an account, with the presumption that a fixed notice period and greater transparency about the reasons for the bank’s decision would facilitate a more effective appeal.
In limited circumstances relating to issues such as suspicions of serious criminal activity or national security, banks would still be allowed to close accounts without a full explanation, sources added.
The issue of unilateral bank account closures has…
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