On 3 August 2023, the FCA published a letter that its CEO had sent to Jeremy Hunt MP, Chancellor of the Exchequer, concerning freedom of expression and the provision of banking services.

In the letter the FCA recognises the increased public concern about payment accounts being closed without fair justification and refers to the role of the Financial Ombudsman Service in adjudicating individual cases. The regulator also refers to banks and building societies being subject to counter money laundering and terrorist financial rules which can allow them to withdraw services on financial crime grounds and it is less clear the extent to which accounts may be terminated for other reasons, which may be unjustified and may contravene law.

The FCA states in the letter that it has been preparing a data exercise to focus on banks and building societies providing payment accounts to consumers and accounts to businesses. In the coming month, the regulator will ask the largest banks and building societies to provide it with the number of account terminations and the reasons for these, number of complaints about terminations, and their outcomes. The FCA will also request data on the number of accounts opened; the volume of new applications refused and any relevant complaints data and information about policies and procedures. The FCA will provide an initial assessment by mid-September.

The exercise will not be fused with the FCA’s ongoing work to review the treatment of politically exposed persons (PEPs) and their family members, as commissioned by the Financial Services and Markets Act 2023. To mitigate the risk of those in prominent public positions being subject to corruption, the government implemented international standards to require enhanced scrutiny of PEPs and their family members, which is supported by FCA guidance. Over the past 18 months, the FCA has reminded firms that they must take a proportionate approach to assessing such individuals. However, concerns continue, and the FCA will reach out to those concerned in the coming weeks and will publish the terms of reference for that review next month.