Thousands of Britons living in Europe may have their bank accounts closed by the end of the year as a result of the Brexit transition.
Barclays, Coutts and Lloyds have notified business and retail consumers that their bank accounts will close shortly before or during the Brexit transition which ends 31 December, The Guardian reported. More British bank accounts held in other banks may close, as well.
Lloyds Bank has informed 13,000 customers in Germany, Ireland, the Netherlands, Portugal and Slovakia that their British bank accounts will be closed and they will need to transfer their money. The bank is not allowed to provide British bank accounts for people living in the EU post-Brexit transition.
“We have written to a small number of customers living in affected EU countries to let them know that due to the U.K.’s exit from the EU, regrettably we will no longer be able to provide them with some U.K.-based banking services,” a Lloyd’s spokesperson told The Guardian. “We want to keep customers informed and offer advice on next steps.”
There is a major logistical challenge banks are facing during the Brexit transition.
Customers who bank with EU-based banks are transferring their accounts, but banks that do not have a stake in the EU will have to apply for a trading license in each separate European Economic Area (EEA) country.
Small banks probably will not be able to obtain licences in EU countries because the cost may be too high for them, according to The Guardian.
In a system called “passporting,” financial services in the U.K. can be traded across the EEA, but this agreement will cease at the end of the year. The U.K. has allowed European banks to provide services for British customers, but Europe has not granted the same access for British bank accounts after the Brexit transition.
“Where possible, firms want to keep providing banking services to customers living in the EEA after the transition period,” a UK Finance spokesperson told The Guardian. “The impact on 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 in the country in which they are resident.”
After the Brexit transition, U.K. banks will have to follow rules according to each country unless a trade deal is reached. These rules will vary and depend on what services different bank offer, as well.
Without new U.K.-EU banking arrangements, British banks could be forced to apply for licences in 27 EU countries, according to the Independent.
Barclays has notified some of its Barclaycard customers living in Europe about the British bank account closures. Britons living in France, Germany and Spain have also been informed.
Customers who have only a credit card with a bank will not be affected by the Brexit transition, the Independent reported.
“In light of the U.K. leaving the EU at the end of 2020 we continue to review the services we offer to customers within the EEA, and any impacted customers will be contacted directly,” a Barclays spokesperson told the Independent.
Private bank Coutts holds some wealthy customers’ accounts who live abroad said that its consumer will need to consider “alternative arrangements” for their accounts next year.
HSBC can continue to service British bank accounts after the Brexit transition because the firm is an international bank with customers in Europe, The Guardian reported. HSBC will keep customers up to date with changes that could affect them.
The Financial Conduct Authority (FCA), which regulates banks in the U.K., expects banks to keep the FCA updated as to the effects on bank customers and notify those customers of changes appropriately.
How do you feel about British bank accounts being closed for those living in Europe? Tell us in the comments.
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