NatWest, Coutts Account Cancellation Captures Attention of Financial Conduct Authority (FCA)

The UK Financial Conduct Authority (FCA) has issued a statement on the recent bust-up over Coutts canceling a high-profile account due to its internal “values.”  Coutts, which is owned by NatWest, shut down the account of former UKIP leader and noted Brexit supporter Nigel Farage in an astounding act of intolerance of legal speech. Originally spun as a compelled action due to the account falling below a threshold amount, in recent days, it has become apparent that Farage was canceled as Coutts did not like his past statements.

NatWest Group CEO Alison Rose admitted that she made a serious error of judgment in discussing Farage’s relationship with the bank.

Earlier this week, Rose personally apologized to Farage. Rose stated:

Both freedom of expression and access to banking are fundamental to our society. It is not our policy to exit a customer on the basis of legally held political and personal views. Decisions to close an account are not taken lightly and involve a number of factors including commercial viability, reputational considerations, and legal and regulatory requirements.

I fully understand the public concern that the processes for bank account closure are not sufficiently transparent. 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. 

To achieve this, wider change is required. But the experience of clients highlighted in recent days has shown we need act now to put our processes under scrutiny.

The deeply inappropriate comments made in the now-published papers prepared for the Wealth Reputation Risk Committee, do not reflect the view of the bank. No individual should have to read such comments and I apologise to Mr Farage for this. I have written to him today to make that apology and reiterate our offer of alternative banking arrangements.  

In addition, I am commissioning a full review of the Coutts processes for how these decisions are made and communicated to ensure we provide a better, more transparent experience for all our customers in the future.

The review will be reporting to me as NatWest Group CEO.

Today, Howard Davies, Chairman of NatWest Group, called Rose’s previous statements in regard to the cancellation of Farage’s accounts a “regrettable error of judgment.”

“The events will be taken into account in decisions on remuneration at the appropriate time. However, after careful reflection the Board has concluded that it retains full confidence in Ms Rose as CEO of the bank. She has proved, over the last 4 years to be an outstanding leader of the institution, as demonstrated by our results. The Board therefore believes it is clearly in the interest of all the bank’s shareholders and customers that she continues in post. The Board is clear that the overall handling of the circumstances surrounding Mr Farage accounts has been unsatisfactory, with serious consequences for the bank. The Board will commission an independent review into the account closure arrangement at Coutts, and the lessons to be learnt from this.”

Rose again apologized for the events that led to the account closure.

Davies said the findings of the cancellation will be made public upon completion.

Following Davies public comment, Sheldon Mills, Executive Director, Consumers and Competition at the FCA, issued the following statement:

“We have raised concerns with NatWest Group and Coutts about the allegations relating to account closures and breach of customer confidentiality since these came to light. We made clear our expectation that these issues should be independently reviewed and note today’s statement from the NatWest Group Board confirming this will happen. It is vital that the review is well resourced and those conducting it have access to all the necessary information and people in order to investigate what happened swiftly and fully.”

The review is expected to guide the FCA on any additional steps necessary in regard to the issue.

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