Brussels - Banks in the European Union have until
mid-September to come clean on fees they charge customers or face mandatory
transparency rules.
"We think the fees should be easy to understand across the
board, with comparable fees charged for comparable services. That is not the
case today," Michel Barnier, the bloc’s financial services commissioner, told a
news conference.
Full transparency on fees would make it easier for customers
to compare charges and switch to a cheaper account, helping to drive down the
high charges seen in some EU states.
“I am disappointed with the response from European banks
with the request I put to them a year ago asking for more transparency,”
Barnier said.
If banks don’t take his request seriously by September 15,
Barnier will take "legislative action with a view to introducing more
standardisation across European markets".
Banks must give clear terminology on what customers are
charged for and by how much, Barnier said as he also gave lenders a year to
make it easier for everyone to open a cheap basic account anywhere in the
27-nation bloc or face legislation in this area too.
About 30 million people over 18 years old in the EU do not
have a bank account, with 6-7 million turned down because of poor credit
history, no proof of income or failing to meet residency requirements, the commission said.
The EU executive adopted a recommendation on Monday, a
non-binding request for member states to crack down on restrictions used by
banks as an excuse to reject account applications.
“This recommendation does not state that payment service
providers will have to accept any application from an individual in any (every) case -
it focuses on what is strictly necessary to enable consumers to use payment
services,” the commission said.
“It will assess the situation in one year’s time and propose
any further measures as necessary, including legislative measures,” the commission said.
The commission said consumers should be able to open a basic
bank account at an unspecified reasonable charge irrespective, of where they
live or their financial circumstances.
It only covers people who are legally resident in the EU and
need an account for personal but not business or professional use.
A basic payment account is defined by the commission as one that allows the customer to deposit and withdraw cash, receive payments such as salaries, issue payment orders, make payments through direct debits and buy goods and services online.
Overdrafts would not be allowed as this would mean credit
was being given, which requires credit history checks.
The EU executive had said it would propose a draft law to
make it mandatory for banks to offer basic accounts, but opted for a non-binding
recommendation as it gives member states more flexibility to tackle hurdles to
opening an account.