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EU outlines draft for bank accounts open to all

09 May 2013, 12:30 CET
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EU outlines draft for bank accounts open to all

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(BRUSSELS) - The European Commission outlined on Wednesday plans to ensure all EU citizens can access banking services that would have to become more transparent and user-friendly.

One measure is designed to make it easier to switch banks, similar to EU measures to open up utility markets in recent years.

Finally, according to proposals seen by AFP the regulations will insist on transparent cost information for consumers.

Transforming the draft into law will require the approval of EU member governments and the European Parliament however, and are to include detailed industry submissions.

Assuming the plans are approved, accounts available to all are to offer the possibility of funds transfers, but no credit-card nor overdrafts, as is frequently the case at present where banking restrictions are imposed on individuals with poor credit ratings.

"Banks will not be allowed to refuse to open a payment account guaranteeing the minimum essential payment services to a consumer with poor credit history or any other type of financial difficulty," the Commission documents state.

Exceptions to these rights would be where individuals are found guilty of breaches of money-laundering or anti-terror legislation, or if a similar type of account aready exists in the country concerned.

Consumers should be able to switch banks within 15 days if they chose one in the same country, and within 30 days if they look across borders, as political leaders seek to create a true EU-wide banking union.

In some countries, the proportion of citizens without current accounts is especially high -- the Commission estimates, for instance, that 25 million people in Bulgaria and Romania do not have payment accounts, meaning they operate largely on a cash or barter basis.

"Whilst single market legislation has ensured that banks can operate throughout the European Union and offer their services cross-border, this mobility is not mirrored for citizens who are often unable to open an account in another member state or to easily switch from one bank to another," the Commission said.

"Not having access to a basic bank account makes everyday life difficult and more expensive," said the man behind the legislative proposals, EU Markets Commissioner and a former French foreign minister Michel Barnier.

He added: "By making it easier to compare fees and change bank accounts, we also hope to see better offers from banks and lower costs.

"The proposal will also benefit the financial services industry by providing additional incentives to offer products cross-border and enter new markets."

EU Consumer Commissioner Tonio Borg said the changes would "favour competition in the retail financial services sector and reward businesses that offer consumers a better choice and price."

Proposal for a Directive on 
Payment Accounts - background information

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