EC Targets Underbanked With Proposed Bank Account Rules

The European Commission has announced future proposals that will give European customers the ability to easily compare bank accounts fees and also switch to other banks, reports BBC News.

European consumers have complained that opening a bank account in a EU country where they are not a resident can often complicated. Under the new mandate Europeans will be allowed the right to open a basic bank account in any EU country.

The difficult process of opening other accounts has led to a high number of consumers who do not have bank accounts. There are about 58 million in Europeans over the age of 15 who do not have a registered payment account. The EC is hoping to reduce the large amount of underbanked individuals through simplifying the process.

France, Belgium and Italy are the only EU countries that legally enforce that citizens are given access to basic bank accounts. The new plans will allow any EU resident to open an account in a EU country of his or her choice. Even consumers who are unemployed or have filed for bankruptcy will be allowed access to a minimum of one provider.

A basic bank account means the customer can execute simple functions such as direct deposit, pensions and benefit deposits and bill payments.

The new law will also demanding that banks provide information to customers that include a list of service fees and charges levied in the last year.

If a consumer decides to switch accounts to a provider within the same country, the EC will order the account to be switched free of cost within 15 days. The UK is already ahead of the game, and currently offers customers a seven working-day switch over plan.

Michel Barnier, EU internal market commission, stated, “By making it easier to compare fees and change bank accounts, we also hope to see better offers from banks and lower costs.”

The EC is hoping to implement the free switch scheme to commence within 30 days.

To read the full story at BBC News click here.