The proposed changes by the British Treasury come in wake of the Nigel Farage affair which saw NatWest apologies to the politician for unilaterally shutting down his account in a subsidiary simply because it did not like his political views.
The proposals will require banks to explain why they are closing a customer’s account and provide three months’ notice.
City minister Andrew Griffith said it would create “a much fairer playing field” by giving consumers more time to send in appeals.
“Banks will need to carefully consider how to meet these requirements in order to avoid cutting across their anti-money laundering obligations and undermining the effectiveness of those measures,” said AML Intelligence columnist David Lewis, an expert with Kroll.
National Crime Agency sources said they also fear the changes could swing the pendulum in favour of money launderers.
NatWest subsidiary Coutts Bank closed Farage’s account, alleging his “xenophobic, chauvinistic and racist views” did not align with its values.
NatWest, Coutts’ parent company, has since apologised to Farage for the comments. To increase transparency about bank account closures and protect free speech, the government updated its rules.
Financial crime investigators at the National Crime Agency (NCA) and other government agencies are dissatisfied about the proposed changes, which would provide customers with more detailed reasons for account closures.
Griffith is planning to hold a meeting next week with banking industry and law enforcement bosses to discuss the details of the reforms.
The Treasury said: “Lawful freedom of speech is a fundamental right that should be respected by banks. There’s no trade-off between that and catching and locking up those engaged in financial crime.”
By fLEXI tEAM