Parliament approves basic bank accounts for all

Withdrawing cash. London, 2008. [Me/Flickr]

A directive guaranteeing all European citizens access to banking services was passed by a large majority in the European Parliament on Tuesday, 15 April. EURACTIV France reports.

The proposed directive on bank accounts, which was adopted yesterday (15 April) at the last plenary session in Strasbourg before the European elections, aims to harmonise and facilitate the opening of current accounts in credit institutions across Europe, ensure transparency of tariffs and simplify the process for consumers to switch banks.

>> Read: Opening, switching bank account to become easier under new EU rules

According to the European Commission, over 58 million Europeans do not have a bank account, a number which does not show the high level of disparity between member states. According to the French Bank Federation, the level of bank penetration in France is 99%. In contrast, almost half of people in Bulgaria and Romania do not have access to basic banking services.

The new rules oblige EU countries to ensure that a sufficient number of institutions provide basic bank accounts and services. The countries must choose which institutions are to provide the services in order to maintain competitive banking fees.

Member states will also be required to create an independent website, providing information on interest rates and banking fees from different credit institutions.

“This directive is all about empowering users of common standard payment services. Guaranteeing access to basic accounts to all consumers, including to migrants and mobile citizens, will stimulate economic modernisation, facilitate free movement and help the most disadvantaged in our societies”, said German MEP Jürgen Klute (GUE/NGL) who was steering the legislation through Parliament.

British opposition

To take effect, the new rules must be approved by the member states, which then have two years to add them to their national law.

The UK is likely to renew its opposition to the proposal during the adoption process. A source from the European Parliament said “there could be a judicial conflict between the UK and the European Commission during the transposition of the directive”.

>> Read: EU strikes deal on universal right to basic bank account

States that already ensure basic banking services want to preserve the existing auto-regulated system, and will no doubt show opposition to some of the new rules.

Having a bank account is considered essential for citizens to fully participate in economic and social life.

Despite this, over 58 million of European consumers over 15 years old do not have a bank account at all.

It is difficult for consumers to compare offers and banking fees from different credit institutions. Switching from an existing bank account to another is complicated, and in some cases, consumers cannot open bank accounts in EU member states where they are not residents. 

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