The European Commission is planning an overhaul that will allow European residents the right to open a basic bank account in any EU country and compare the costs.
Only a few EU countries currently regulate to ensure that people can access a basic bank account, even if they have previously been made bankrupt.
But the Commission hopes to push forward ambitious reforms to make accessibility to a bank account in any EU member state a mandatory right.
It estimates that over 50 million people across the EU do not have access to a bank account, making it more difficult for them to receive salaries or to pay bills.
The decision by the Co-operative Bank to stop offering bank accounts to discharged bankrupts in the autumn of last year left Barclays as the sole remaining bank in the UK to cater for that sector of the market.
Sarah Brooks, Director of Financial Services at Consumer Focus, said that the lack of availability would only worsen the industry’s attempts to reduce the million people without a bank account in the UK (read more).
The government responded by discussing changes to insolvency law that would make it easier for banks to offer these accounts by reducing their liability for funds that should be heading to creditors (read more).
But the Commission also wants to improve transparency as part of a sweeping move that will make it easier for consumers across Europe to compare the costs of banking and to switch providers.
Under its plans, banks will have to send customers a list of its charges for basic services to allow consumers to compare between different institutions.
It also wishes to make it easier for people to switch bank accounts by imposing a 15-day deadline for banks to switch accounts between providers in the same country, and a 30-day deadline for banks to switch accounts across EU countries.
The UK is set to implement a seven-day switching mandate later this year, which. it is hoped, will boost competitiveness between banks.
Keith McDonald
Which4U Editor
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