These new rules, which are set out in the EU Payment Accounts Directive, set common standards that EU members need to meet in order to ensure a number of services are available to consumers, including:
- an account switching service
- a right of access to a basic bank account for those who are legally resident in the EU
- clear and transparent information on fees and charges
Bank customers in the UK can already switch their current account quickly and reliably by using the 7 day Current Account Switch Service (CASS), which was launched in September 2013. Major UK banks have also already agreed to make available fee-free basic bank accounts by the end of 2015.
The government intends to legislate where necessary to ensure that the UK complies with the directive, while minimising any negative impact on the UK’s existing CASS and basic bank account agreement. The proposed legislative approach includes:
- putting in place a framework to ensure that CASS can continue as an alternative measure to the switching process described in the Directive
- preserving the UK’s existing basic bank account policy
- standardising the annual statement of fees consumers receive from their banks as well as ensuring customers receive a Fee Information Document prior to choosing their bank account
The regulations will not enter into force until September 2016, but the government is consulting now in order to give banks and customers as long as possible to prepare for them.
The consultation will run for 6 weeks.