On the 8th of May 2013,
the EU Commission published the proposal for a Directive on Bank Accounts. The
Directive covers three aspects regarding bank accounts: comparability of bank
fees, facilitated process for bank account switching and access to a basic bank
Financial services are
an essential part of families' lives. COFACE welcomes this proposal which could
be a big step forward for families across Europe,
whether they are financially excluded, have trouble understanding and comparing
bank fees or wish to switch banks without going through a burdensome and costly
provisions within the Directive still need some improvements:
- While the Directive
calls on Member States to appoint at least one payment service provider that
will offer a basic payment account to consumers, it is essential that the
appointed payment service provider covers the entire territory of the Member State
to ensure that the consumer will have appropriate access to money withdrawal or
electronic payment services and facilities. The preferred approach for COFACE
would be that a public body would have the competence to designate a payment
service provider to open a basic bank account for a consumer that faced a
rejection for no legitimate reason.
- The Directive refers
back to several other pieces of legislation including the 2005/60 Directive on
money laundering. Therefore, the intent
of the Directive on ensuring that opening a bank account "is not made
excessively difficult or burdensome for the consumer" might not mean much
since banks will still need to comply with other legal provisions. Therefore, COFACE insists that the Directive
mentions the need to revise or at least look into the related legislations
which impact on consumer access to a basic bank account. For instance, the situation of migrants,
homeless people, foreign students from non-EU countries all face difficulties
in opening a basic bank account and the Directive will not address them.
- The Directive comes
short in the required information that consumers receive in relation to opening
a basic bank account. While transparency
of fees and notifications such as a refusal to provide a basic bank account for
a consumer are essential, the Directive should include several other mandatory
information provision to the consumer. For instance, the consumer should know
from the outset that his account can be terminated under certain conditions
like inactivity for 12 months. In case
the consumer receives a refusal notification, this should include an
explanation of the refusal and contact details of a public body where this
decision can be contested.
- Finally, the
Directive specifies that payment service providers have to offer a basic bank
account either free of charge or at a reasonable fee. COFACE has always defended the right to a
free basic bank account for many reasons including the fact that the marginal
cost to extend the access to basic bank accounts to the financially excluded is
negligeable. However, the compromise that the Commission has proposed,
especially considering the limits that the Directive imposes on the level of
the fees, is reasonable.
In closing, COFACE
wishes to insist that it fully supports this Directive and applauds the
Commission, especially Commissionner Barnier and Commissionner Borg, for
unveiling such a proposal despite extremely intense lobbying from the Banking
industry to sink this initiative. COFACE hopes that both European MEPs and EU
Council Ministers will find the strength to serve the interest of European
families and ensure that this piece of legislation gets through without being
stripped of it's initial intent further down the legislative procedure.
The European Parliament calls for a Directive on basic
bank account access for all
has long advocated for the need to guarantee the right to a basic bank account
On the 4th
of July 2012, the European Parliament adopted a recommendation calling upon the
Commission to publish a report on the situation of access to banking services
by September 2012 and the proposal of a Directive by January 2013. Considering
the figures and the recent financial and economic crisis, it is high time that
the Commission took legislative measures to remedy the situation. The most recent figures point to 7% of the EU
population deprived of a basic bank account (about 30 million individuals!),
although, as the Parliament's report underlines, a basic bank account is
essential to social inclusion in terms of access to employment, healthcare,
the set of six recommendations adopted by the EP
ensuring that "[…] any
natural person who is acting for purposes other than his trade, business, craft
of profession, legally resident in the Union, has the right to open and use a
basic payment account with a payment service provider operating in a Member
COFACE wishes to stress a few points which require particular attention:
- The EP recommendation proposes that basic bank
accounts be either provided for free or at a reasonable cost. COFACE has long supported the provision of a free basic bank account (see our position
papers for more information). The term "reasonable" is much too vague
and could lead to abusive fees. Capping the total annual fees related to
opening and using a basic bank account could be a solution provided the cap is
meaningful and well defined.
- The recommendation still does not cover the issue of
regularisation of migrants since only EU nationals or "legal
residents"are covered so far (leaving out the issue of undocumented
migrants). This touches upon the issue of migration and should be addressed
- Furthermore, banks could still abuse money laundering
laws and other legislations in order to circumvent their obligation to provide
a basic bank account to citizens.
continue to monitor the future developments and follow up the Parliament and
the Commission's work on financial inclusion.
Services of General Interest
COFACE sets great store by the continued existence of a significant provision of non-commercial services of general interest (SGI) in the Member States of the European Union. As a voice for families in Europe, especially those who for various reasons (inability to pay, living in remote areas, physical or mental disability, age, etc.) have limited or no access to market services, COFACE is concerned that the SGI sector in its totality -commercial and non-commercial services alike- is gradually slipping into the market sphere.
The liberalisation of services should not lead to the disappearing of SGI. Water, gas or electricity supply services, as well as postal services are not only essential for families but also allow harmonising the way of life on the entire territory. COFACE wishes that these services were taken into particular consideration in the legislation. Quality and accessibility for everyone should remain the fundamental principles of this category of services.
COFACE has been arguing the necessity to provide a free bank account covering essential features such as withdrawal and money transfers for all citizens. The rationale being the following: in the last few decades, it has become impossible to receive any money transfer by other means than via a bank account. Payments in cash are no longer possible. Therefore, a person without a bank account cannot receive a salary, social or family benefits, effectively excluding him/her from society.
Another aspect of financial services is credits, especially mortgages which mostly concern families. Over-indebtedness is a problem as such, but for a family, it has a most dramatic set of consequences. Children growing up in poverty, living in an inadequate environment, inadequate housing… bodes ill for their healthy development.
COFACE has promoted measures such as the positive credit history file to ensure responsible lending and borrowing and prevent over-indebtedness.