LLet’s start with where Coutts had a right to get rid of Nigel Farage. The former UKIP leader, according to the “Wealth Reputational Risk Committee” meeting memorandum, nearly fell below the qualification threshold for customer status.
That threshold is holding loans or investments of more than £1 million, or more than £3 million in savings. Farage would soon pay off his mortgage, giving Coutts an option. He could keep you as a customer and bypass the qualifying criteria. Or he could put you on a “slide path,” in committee parlance, to be removed. He opted for elimination.
And one cannot call this a case of being “unbanked”, as Farage is doing, because it was swiped to another entity within the same group. NatWest, hardly an obscure outfit, offered him a personal account and a business account. So, if one wants to, one can indulge in some sport at Farage’s expense: on one level, he just complains about having to do banking with common people.
Except that the story is not so simple. The minutes of the Coutts committee meeting make two things clear. First, Farage was still considered to be wealthy enough to be a profitable client. “Customer EC [economic contribution] now it is enough to retain on a commercial basis,” he says, noting that he had been downgraded to “lower risk” in the “politically exposed persons” classification.
Second, the choice to shoot Farage was motivated by Coutts’s objections to his views. “The committee did not think of 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 organization.” He failed a political or inclusion test and was considered a reputational risk.
Are we really happy with the idea of bank committees making inclusive judgments about clients and then not explaining their decisions? Surely it is possible to deeply disagree with Farage’s views on most issues and find Coutts’s stance alarmingly illiberal.
The Financial Conduct Authority (FCA), the main financial regulator, doesn’t see much of a problem, it must be said. Its chairwoman, Ashley Alder, told the Treasury select committee that regulated companies must treat customers fairly, but added: “For banks and other commercial enterprises, it’s fundamentally up to them to choose who they do business with.” She continued: “I’m not aware of anything in the FCA rule book that gets to the point about how banks judge their own attitude to reputational risk, if that’s what it’s about.”
Well, okay, banks are private companies (including NatWest, 39% state owned) and they get to choose their customers. But it is also reasonable to expect some accountability and transparency in the process. For example, it’s hard to pinpoint how NatWest’s and Coutts’ stated purposes and values lead them to consider, among other things, Farage’s contact with unvaccinated Novak Djokovic or his retweet of a Ricky Gervais trans joke.
This is one of NatWest’s descriptions of its purpose: “We champion potential, helping individuals, families and businesses prosper. Because when they prosper, so do we.” That’s blurry. As for Coutts, the front page of his website boasts that he wants clients who are “disruptive and challenging,” two descriptions that perversely could apply to Farage.
In money laundering and similar cases, it is not possible for banks to explain why a customer has been abandoned. The regulatory requirements for secrecy are fairly strict. But there is a problem if confidentiality requirements elsewhere are used as a cover to exclude accounts of politicians whose views bank bosses find distasteful.
Farage makes a difficult case because many other people understandably find him objectionable. But Coutts’ position here is strange. It appears to be this: if we find his views legal but offensive, we won’t do anything if he has a £1 million deposit; but we can leave you without explanation if you have less. How does that align with those fluffy corporate values?