More rights on bank accounts

Having a bank account has become an essential part of everyday life. It allows citizens to make and receive payments, to shop online and to pay utility bills.

If a person has a standing order and wants to change bank accounts, he or she can expect that something will go wrong four times out of five!

Not having a bank account makes everyday life difficult and more expensive. However, today, around 58 million Europeans still do not have a bank account.

Of these, 25 million would like to have one.

Europeans also find it difficult to open a bank account in another European country if they are not resident there. Students are faced with this problem in their thousands every year.

Furthermore, many people are unhappy with the service they get from their bank but do not change banks because they find it difficult to compare information on the alternatives that are available on the market and because the process of switching is complicated and, too often, mistakes happen.

The studies that we have carried out demonstrate that if a person has a standing order, such as a regular rent payment, and wants to change bank accounts, he or she can expect that something will go wrong four times out of five! This is not acceptable.

These are just some of the problems that Europeans encounter daily with their banks.

If we want citizens to fully benefit from the Single Market, we need to solve these problems.

European consumers should be able to shop around and find the offer that best suits their needs at the best possible price.

This is why the European Commission has just proposed new rules to address the problems encountered in these specific areas: access to a basic bank account; transparency and comparability of bank account fees and the possibility of switching bank account from one provider to another.

Over the years, we have tried to solve these issues by encouraging the banking industry to self-regulate and by recommending improvements to member states but our attempts have had little effect, which is why legislation has now become necessary.

In future, all consumers who legally reside in the EU will have the right to open a basic bank account in any EU member state, irrespective of their individual financial situation.

This account will allow a range of basic everyday essential operations – such as receiving a salary or paying utility bills – and must be made available free of charge or for a reasonable fee.

Second, switching bank accounts will be much simpler and quicker. Banks or other account providers will have to complete the process within 15 days (30 days if the switch is made between providers located in different EU Member States) and it will have to be provided free of charge.

Finally, we want all bank customers to receive standardised information on the services they can expect from their banks and the corresponding fees.

We also want to ensure that each member state in the EU has at least one accredited website comparing prices and conditions for bank accounts to make it easier for consumers to compare and find the right offer on the market.

With our proposals we aim at making a real difference to the lives of millions of European citizens by giving them the tools to participate fully in society and take advantage of the best offers on the market.

Industry will also benefit from a more competitive environment and a more integrated European market for retail financial services.

This proposal complements all the other rules we have already proposed to make the European financial sector safer, sounder and more robust.

Michel Barnier is European Commissioner for the Internal Market and Tonio Borg for Consumer Policy.