FCA Urges Banks to Review Account Handling for Vulnerable Groups

The UK Financial Conduct Authority (FCA) has called on financial institutions to reassess their policies regarding account denials and closures. The watchdog aims to ensure that vulnerable consumers and organizations aren't unfairly affected. The FCA also clarified that no accounts had been closed due to lawful political opinions but stressed the need for compliance and accountability.

The UK Financial Conduct Authority (FCA) issued a directive urging financial institutions to reassess how they handle account denials and closures, especially concerning vulnerable consumers and organizations such as charities and pawnbrokers.

In its latest report, the FCA recognized efforts by banks, building societies, and payment firms to support customer access to accounts, while also confirming no evidence of account closures related to lawful political opinions. Nonetheless, the FCA has requested senior leaders to personally attest to compliance with the rules.

This action follows last year's crisis involving NatWest and former Brexit party leader Nigel Farage, which led to leadership changes at the bank. The FCA emphasized the need for clear definitions of reputational risk and urged more support for those without access to bank accounts.

(With inputs from agencies.)