New EU rules enshrine right to bank account in other states

The EU Payment Accounts Directive was passed two years ago and set out a number of basic rules regarding current accounts, switching bank accounts between countries and comparing banks, charges and fees.

One of the most important rules for EU expats, who often keep accounts in two countries, is a ban on discrimination based on your place of residence. The EU legislation stipulates a ‘right of access’ to a payment account and has a non-discrimination clause.

In the UK the EU legislation has been transposed in The Payment Accounts Regulations 2015, which comes into force on September 18.

It includes a non-discrimination clause (Part 4, Article 18) and sets out the terms of what is meant by a ‘payment account’ – essentially a basic current account.

Not only can you not be refused a payment account on the basis of residency but the new legislation also means that you do not even need a fixed address. A bank or credit institution has ten working days to open or refuse an account but a refusal must be explained and the grounds for doing so are narrowly confined to areas such as money laundering and links to other acts of criminality. Any refusal should also come with explanations as to the customer’s next steps, including their right to appeal to the Financial Ombudsman Service.

In France much of the EU law has already been transposed. Key parts of the legislation were about defining and clarifying banking actions and fees, something that was long overdue in France’s formerly opaque banking industry. Over the years, legislation has been passed to make it easier to compare accounts and charges (see facing page).

At the beginning of the year a change to law made it easier to switch bank accounts for free via an automatic system, similar to that in place in the UK. Under EU law this automated system should now work across all member states and certainly between the UK and France.

In terms of non-discrimination for EU citizens resident in France, a spokesman for the Ministry of Finance said that there transposition into French law was still on course.

The clause is contained in a law, commonly known as “Sapin 2”, and should be voted through at the end of this month. However the spokesman pointed out that a right to a bank account still existed for residents of France via other non-discrimination legislation.

As a ‘Brexit’ has not been activated and will take years to organise the above applies to Britons. After a Brexit it will be subject to negotiations.