MEPs seek to improve basic bank account access

05 July 2012 17:20:47

Access to a bank account should be a basic right.

All EU citizens should have access to a bank account, even if they are homeless or have a low or irregular income, MEPs have said. In a resolution adopted yesterday (July 4th), members called for all citizens to be able to use basic banking services. Although the move does not guarantee new legislation, it calls on the European Commission to table proposals to tackle access issues by January of next year.

Surely everyone has a bank account?
You might think that everyone in Europe can easily open a bank account if they choose to do so, but this is actually not the case, even in the UK. Figures suggest that around 30 million adults in the EU do not have a bank account, with the lack of a permanent home address and a low income acting as the main barriers. Many people regard having access to a bank account as a basic right, however, and MEPs have now decided that legislation at an EU-wide level is needed to make this a reality.

Why is legislation needed?
As with many issues that have arisen in recent years, voluntary measures have failed to tackle the problem sufficiently. The fact that millions of people still do not have a basic bank account means efforts thus far have failed to have the desired effect and most MEPs now believe legislation is necessary.

What are MEPs demanding?
The resolution calls for payment service providers to be required to offer a basic bank account that is their most affordable account for basic transactions. Banks and other such institutions should no longer be able to refuse a person an account on the grounds of low income, employment type, credit history or levels of debt. Furthermore, the resolution requires the European Commission to submit proposals for a directive ensuring access to basic payment services by January 2013. MEP Jurgen Klute insisted that banks "have a responsibility to society" and that the resolution has "strong cross-party support".

Is this relevant to the UK?
Legislation will be most welcomed by people living in member states with no legal or voluntary requirements for providers to offer basic bank accounts to all, but even people in the UK should benefit, according to campaign group Consumer Focus. Sarah Brooks, director of financial services, explained that while UK citizens have enjoyed "really good" basic bank accounts in the last 10 years, there has recently been "a worrying trend of banks reducing the benefits and features of these accounts". These include restrictions on access to cash from ATMs and increased charges.

Ms Brooks said Consumer Focus will be discussing what the resolution means for UK consumers with regulators and the banking industry, as well as ways to help the 1.5 million Brits who do not have a transactional bank account. "Being outside of mainstream banking means they are unable to get deals or access services that many just take for granted, such as cheaper utility bills when paying by direct debit," she pointed out.

‹ Back

All news articles

All Home Page News
All News Stories

Product Offers
Please ensure that you fully read the terms & conditions of any product or policy before you decide to proceed and are fully aware of the total costs and the benefits and any exclusions or limitations applicable to the product or plan.

Please note that the product links will take you direct to the Issuer or Insurer's site direct and we cannot be held responsible for the information which they provide within their own sites. On some comparison tables we use a star rating which rates products by visitor popularity.