The Charity Finance Group and the Small Charities Coalition have written to the Financial Conduct Authority to ask it to clarify the law governing changes of signatories on charities' bank accounts with a view to introducing "more proportionate, light-touch" approach.
The joint letter from Caron Bradshaw, chief executive of the CFG, and Alex Swallow, chief executive of the SCC, says many charities view changing signatory details as "one of the most time-consuming and burdensome aspects of managing their banking arrangements".
The letter says charities often have multiple authorised signatories for their bank accounts, which need to change when new staff and trustees are appointed. It says banks often require a high level of documentation and authorisation.
"An overly complex process causes particular problems for smaller charities, which are often staffed by volunteers with varying degrees of financial confidence," the letter says. "Understandably, not all bank staff are used to dealing with charities, meaning that those with queries can struggle to get quick or straight answers."
Many banks also require changes to be authorised by "directors", it adds. But it observes that in many charities banking decisions are delegated to staff.
It also notes that there is a huge variance among banks, with some taking a light-touch approach.
"We would be grateful if you could raise this issue internally and clarify what banks’ legal requirements are around signatory verification on incorporated and unincorporated charity accounts," the letter says. "We hope this will support our work to give banks with onerous requirements the confidence to adopt a more light-touch, proportionate approach without compromising legal standards."