On 14 October 2020, the House of Commons’ Treasury Committee published a letter it had received from the FCA in response to earlier questions that the Committee had raised on UK bank closures of current accounts of customers living in the EU post transition period.
Key points in the FCA’s letter include:
- Not all firms are informing customers their current accounts will be closed. However, where firms do decide to do so, there are contractual provisions between the firm and the customer governing the notice periods they need to give. These vary by firm and by banking product.
- Under the Payment Services Regulations 2017, banks must provide a minimum notice period of two months when closing in-credit current accounts. FCA rules and guidance set out other requirements for banks to provide clear and timely information to customers when closing other types of account (see BCOBS 4.1.1 in the FCA Handbook).
- Firms must be able to show they have considered how their plans for the end of the transition period may affect their customers, keeping in mind that different categories of customer might be affected in different ways. This includes identifying whether closing accounts would cause any particular customers or classes of customer undue financial hardship, taking into account the availability of alternative products.