On 28 October 2015, the federal cabinet adopted the draft of a new Payment Account Act. The bill constitutes a key step forward in protecting consumer rights in the financial sector. The new rules will enhance the transparency and comparability of bank account fees and will make it easier for consumers to shift accounts from one provider to another. The draft legislation also gives everyone the legal right to a basic bank account. This means that even people who were refused a bank account in the past will be able to open an account with basic payment functions. The bill enacts a corresponding EU directive into German law.
The new legislation aims to improve the transparency and comparability of bank account fees. Payment service providers will be required to inform consumers about the costs and fees of account-related services. In addition, websites comparing payment accounts will make it easier for consumers to compare the terms and conditions of various accounts and to find the account that best suits their needs. The new rules will also make it easier for consumers to move their payment accounts from one provider to another. All of these steps will enhance competition among account providers.
Under the new legislation, all credit institutions that offer payment services to the public will be required to offer and operate basic bank accounts (obligation to contract). These basic accounts will feature basic payment services including deposits and withdrawals, direct debits, transfers of funds, and payment card transactions. Credit institutions may charge only reasonable fees for such services.
Credit institutions may reject applications to open a basic account only when specific grounds for refusal are met. These grounds are defined narrowly and exhaustively in the legislation. Credit institutions may refuse to open an account:
- if the applicant already has a basic account in Germany is in fact able to use that account’s services
- if the applicant has committed certain types of criminal acts or violated other legal prohibitions
- if the credit institution in question has terminated a bank account previously held by the applicant due to late payment or payment default.
Consumers whose applications to open a basic account are rejected may take their cases to civil courts or consumer arbitration boards. Alternatively, a new administrative procedure will be set up by the Federal Financial Supervisory Authority (BaFin) that will allow affected consumers to enforce their claims effectively and affordably.