“The escalation team just reached out to me. They told me that the account was being shut down, and they wouldn’t give me a reason. I asked them if they would ever give me a reason. They said no.”
This eerily Kafkaesque account is from California-based writer, activist, and social and political commentator Elad Nehorai. At the beginning of this week, he learnt that his bank of many years, Bank of America, had closed his account with no warning or explanation. He couldn’t touch his funds and he had no idea why. Nehorai posted a thread on Twitter that went viral and ultimately prompted the TBTF lender to partially back down. As Nehorai has come to realise through this ordeal, he is not the only person to have suffered this fate (h/t to Lambert for bringing this to my attention):
In the end, Bank of America removed the hold on Nehorai’s account, though it is, to all intents and purposes, still closed. As Nehorai notes, many other people who do not have his public reach or social capital have not been so lucky:
The responses to Nehorai’s twitter thread suggest that this “horror show” is anything but a freak occurrence. And it is not new: CBS published an article in June 2022 about a woman who was shut out of her 17-year account with Bank of America just before undergoing surgery for thyroid cancer, and for certain minority groups, in particular Muslims, this sort of thing has been happening for over a decade. Nor is it exclusive to the US.
Farage Furore
At the end of June, as many readers no doubt know, the retired British politician Nigel Farage went public with the new that Coutts, one of the UK’s oldest private banks, had closed his account without warning. While Farage said the bank had given no reason for the action, he believed it was because of his former designation as a “politically exposed person” (PEP). As the BBC notes, PEPs generally pose a greater risk for financial institutions as they are considered to be more exposed to potential involvement in corrupt practices due to their position and the influence they may wield.
The story quickly went viral. Many of Farage’s fiercest detractors celebrated the fact that “Mr Brexit” was finally paying a price for the damage he is believed to have caused. Others were more attuned to the broader risks and dangers posed by the spectre of politically motivated bank account closures:
In the resulting furore, Coutts told the BBC that the real reason for its decision was that Farage’s account didn’t have enough money in it — an allegation that Farage roundly denies. This prompted a flurry of calls to the broadcaster from other Coutts customers who said that their accounts are also below the necessary threshold yet they have not been threatened with account closure. As BBC reporter Simon Jack noted, the bank clearly has “a lot of discretion” when it comes to these sorts of actions and decisions:
In an article for the Daily Telegraph, the former Brexit Party leader says he was also rejected by seven other banks when he approached them about becoming a customer. Natwest, Coutts’ parent bank, apparently offered him a standard account, but according to Farage only after he went public with his story. Also, Farage claims that several family members have apparently had their accounts shut after Chris Bryant, a Labour MP, “falsely” accused Farage of taking money from Russia.
In the wake of the Farage furore, the UK government has launched a probe into whether banks are closing accounts of people who are “politically exposed.” But the focus appears to be exclusively on elected officials and their families…
Read the full article on Naked Capitalism
Nick Corbishley 