On 20 March 2014 the European Parliament and the Council of the EU reached political agreement on the Commission proposal for a Directive on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features (the “Bank Account Directive”).

The proposal sets out to make bank accounts accessible to all, transparent and attempts to make it easier to switch from one bank account to another. By providing for a right to a basic payment account, irrespective of a citizen’s place of residence or financial situation, the obstacles faced by many in accessing basic banking services cross-border should be removed.

The key elements of the directive are:

  1. Access to payment accounts, as the proposal provides for all EU consumers, without having to be residents of the country where the credit institution is located and irrespective of the individuals financial situation, a right to open a payment account to perform essential operations (for example, receiving their salary);
  2. Comparability of payment account fees, by making it easier for consumers to compare the fees charged for payment accounts by payment services providers in the EU; and
  3. Payment account switching, by establishing a simple and quick procedure for consumers who wish to switch their payment account to an account with another payment service provider within the same Member State and by facilitating the process of closing a bank account in one Member State and opening it in another.

The next steps involve the European Parliament voting in favour of the proposal and the Council formally adopting the same proposal. A copy of the proposal for the Bank Account Directive can be found by clicking here.