Tougher rules to stamp out debanking

It was hard to miss the headlines over the summer when Nigel Farage argued that he had been shut out of his bank account due to his political views. At the time, Andrew Griffith, Economic Secretary to the Treasury, said: "Banks occupy a privileged place in society, and it is right that we fairly balance the rights of banks to act in their commercial interest, with the right for everyone to express themselves freely."

To better protect freedom of expression, the Treasury announced plans to force banks to "explain and delay" any decision to close a bank account. These plans include changes that would extend the notice period for termination of a framework contract from two months to 90 days and mandating that providers give a clear and tailored reason for termination. Today we have seen a further policy statement on this topic from Treasury, providing more clarity on the implementation of the reforms, their intended scope, the government's expectations for how the reforms should apply to payment service framework contracts in practice, and when the government intends to introduce the legislation to underpin the reforms.

Next steps include a public consultation on how the changes are best delivered (expected shortly), followed by legislation next year. Meanwhile, banks are being reminded to take seriously existing obligations not to discriminate.