Question to the HM Treasury:

To ask His Majesty's Government what steps they are taking to prevent banks from closing, or refusing to open, accounts for any reason other than unlawful activity.

The Government consulted specifically on the issue of contract termination and freedom of expression for payment service providers as part of its review of the relevant regulations – the Payment Services Regulations 2017 – and is currently reviewing responses to determine if legislative change is needed.

The Government is committed to bringing a Written Ministerial Statement before the House to report on the Government’s findings on this matter, and to set out if any changes to regulation are necessary, ahead of its formal response to the Review.

Concerning closures relating to Political Exposed Persons (PEPs) specifically, the Financial Services and Markets Act 2023 commits the FCA to carry out a review into financial institutions’ adherence to the FCA’s guidance on PEPs. This guidance is clear that financial institutions should not decline or close a business relationship with an individual solely on the basis that they are a PEP.

I have written to the FCA to set out the Government’s expectations for this review and have made clear that the FCA must assess the extent to which firms are taking a blanket approach and refusing all PEP customers.

I have also additionally written to underline the importance of the FCA’s review and set out the Government’s expectation that the FCA will prioritise this review over the coming months.