Our letter contained a detailed briefing on the problem of overly risk-averse banks preventing agents from opening accounts to process funds belonging to their landlords.
Following a series of high-profile account closures, Propertymark has written to the Rt Hon Jeremy Hunt MP highlighting the ongoing issues and pushing for action from the UK Government to find solutions that reduce barriers for letting agents to operate.
Guidance is clear but issues persist
Propetymark successfully lobbied the Joint Money Laundering Steering Group to produce guidance with the aim of showing banks that their actions were not in line with AML regulations. The revised 2020 guidance acknowledges the distinction between the AML and CMP requirements for letting agents.
This means that banks should be considering whether the customer is subject to the AML regulations, and any other regulatory or professional conduct obligations such as client identification rules, professional conduct rules relating to dealing with funds in pooled client accounts, or client money protection regulations.
Baroness Penn’s response recognises the importance of pooled client accounts (PCAs) to lettings businesses and states that the UK Government has worked closely with UK Finance to reiterate this to banks following continued reports of letting agents having their PCAs closed.
Support for agents
Propertymark has intervened with bank branches on behalf of members to explain the situation and outline that they are not complying with current industry guidance and best practices, and that letting agents cannot function without a pooled client account.
We have also offered alternative solutions for members who cannot find a high-street bank willing to open a pooled client account for their business, such as the use of a Client Accounting Service Provider (CASP), which is a third-party organisation that manages client money on behalf of the agent.
Member experiences matter
Agents who have had challenges opening or retaining a pooled client account are encouraged to get in touch with our Policy and Campaigns team to share their experience via [email protected]
We will use insight gathered from our members to shape our approach to future lobbying, input, and consultation work.