Let’s start with where Coutts was within its rights to dump Nigel Farage. The former Ukip leader, according to the memo of the meeting of the “Wealth Reputational Risk Committee”, was about to fall below the qualifying threshold to be a customer.
That threshold is maintaining borrowings or investments of more than £1m, or more than £3m in savings. Farage was soon to pay off his mortgage, presenting Coutts with a choice. It could keep him as a customer and overlook the qualifying criteria. Or it could put him on a “glide path”, in the language of the committee, to being removed. It opted for removal.
And one cannot call this a case of being “debanked”, as Farage is spinning it, because he was glided towards another entity within the same group. NatWest, hardly an obscure outfit, offered him a personal account and a business account. Thus, if one wishes, one can enjoy some sport at Farage’s expense: at one level, he is merely complaining about having to bank with the common people.
Except the tale is not that straightforward. The minutes of Coutts committee’s meeting make two things clear. First, Farage was still regarded as wealthy enough to be a profitable customer. “The client’s EC [economic contribution] is now sufficient to retain on a commercial basis,” it says, noting that he had been downgraded to “lower risk” in the classification of “politically exposed persons”.
Second, the choice to get shot of Farage was motivated by Coutts’ objections to his views. “The committee did not think continuing to bank NF [Nigel Farage] was compatible with Coutts given his publicly stated views that were at odds with our position as an inclusive organisation.” He failed a political or inclusivity test and was regarded as a risk reputation-wise.
Are we really happy with the idea of bank committees passing inclusivity judgments on customers and then not explaining their decisions? It is surely possible to disagree profoundly with Farage’s views on most issues and find Coutts’ stance alarmingly illiberal.
The Financial Conduct Authority (FCA), the chief financial regulator, doesn’t see much a problem, it should be said. Its chair, Ashley Alder, told the Treasury select committee that regulated firms must treat customers fairly but added: “For banks as well as other commercial enterprises, it’s fundamentally up to them to choose who they do business with.” He went on: “I’m not aware of anything in the FCA rulebook that goes to the point around how banks judge their own attitude to reputational risk, if that’s what it comes down to.”
Well, OK, banks are private businesses (even NatWest, 39%-owned by the state) and they can choose their customers. But it is also reasonable to expect some accountability and transparency in the process. It is, for example, hard to pin down how the stated purposes and values of NatWest and Coutts lead them to consider, among other things, Farage’s contact with non-vaccinated Novak Djokovic or his retweeting of a Ricky Gervais trans joke.
Here’s one of NatWest’s descriptions of its purpose: “We champion potential, helping people, families and businesses to thrive. Because when they thrive, so do we.” That’s just blurry. As for Coutts, the front page of its website boasts that it wants clients who are “disrupters and challengers”, two descriptions that, perversely, could be applied to Farage.
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In money-laundering cases and suchlike, it isn’t possible for banks to explain why a customer has been ditched. The regulatory demands for secrecy are rightly strict. But there is a problem if requirements for confidentiality elsewhere are used as cover for excluding accounts of politicians whose views the bosses of banks find distasteful.
Farage makes a difficult case because so many other people understandably regard him as objectionable. But Coutts’ position here is odd. It seems to amount to this: if we find your views lawful but offensive, we’ll do nothing if you’ve got £1m on deposit; but we may dump you without explanation if you’ve got less. How does that align with those fluffy corporate values?