Britons face bank account closures after Brexit – are you affected?
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Bank accounts are evidently extremely important to many people, not only for putting away money but also for conducting their day-to-day finances. However, the ongoing Brexit negotiations have been complex, and banks have informed certain customers their accounts could close by the end of the year. The group which would be affected by such closures are UK expats who have made the decision to live in the European Union.
At present, there are over one million UK citizens who are living in the EU.
While not all will be affected by such changes, certain rule changes are likely to be momentous for others.
On December 31, EU-wide ‘passporting’ rules are set to expire.
Currently, passporting allows UK banks are able to trade as part of the European Economic Area (EEA).
However, once the Brexit transition period comes to a close at the end of the year, passporting is set to no longer be in place, and the UK will no longer adhere to the same regulatory framework as other countries.
There will therefore be different rules in place for varying countries the UK will have to consider.
Some banks will therefore be forced by regulators to withdraw offerings of certain products.
The only thing which could save such an arrangement is if UK and EU officials specifically lay out rules within a Brexit deal.
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As there is no deal confirmed at the moment, some banks have taken the cautious step to inform select customers their accounts could be closed.
Recently, close to 13,000 Lloyds Banking Group customers have received correspondence informing them of closures.
Banks such Barclays and Coutts have also reached out to some of their customers to inform them of the potential decision.
In a statement, UK Finance said: “Where possible, firms want to keep providing banking services to customers living in the EEA after the transition period.
“The impact of each customer will vary depending on the operating model of their bank or provider, the product or service being provided, and the legal and regulatory framework of the country in which they are resident.
“Impacted customers resident within the EEA should be contacted by their provider to inform them of any changes to the services they receive and any actions they need to take.”
Changes to services offered, and closures of bank accounts, are likely to be challenging news for the individuals affected.
However, there have been calls for further guidance on the matter.
Recently, Conservative MP Mel Stride wrote to the Financial Conduct Authority (FCA) to clarify the time which customers would be given to transfer their funds.
He also asked for further information on the notice firms would be giving customers prior to account closure.
Commenting on the correspondence, he said: “Many British expats in the EU are being told that their UK bank accounts will be terminated at the end of the year.
“It’s vital that they’re given sufficient warning so that they have tie to make alternative arrangements.
“I’ve asked the FCA what length of notice period it considers sufficient, and how they make sure that firms adhere to it.”
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