The Chancellor has announced a plan that will enable regulators to take action if any bank is found to undermine or fails to protect its customers’ rights. Treasury plans to consult soon on how best to deliver the changes, and will then make the necessary legislation next year. The changes, previously announced, will include increasing the notice period for payment service framework contract terminations to 90 days, and will require banks to give customers clear and tailored explanations for why they have closed accounts – with limited exceptions such as where it would break the law to do so.
The changes will require amendments to Regulation 51 of the PSRs and the changes will apply to all providers within scope of the current regulation. Pre-existing carve outs will continue to apply, as will the corporate opt-out. Notwithstanding this, the Government is sending a clear message that it expects PSPs’ default position to be to offer 90 days’ notice and clear and tailored explanatory reasons. The Government doesn’t plan to prescribe the information, as it says what matters is the outcome.
The Government plans to publish the necessary legislation to make these changes by the end of 2023 and get Parliamentary approval as soon as time allows.