Experience with Policy Initiative(s. Every consumer who has their principal residence in Belgium is entitled to a basic banking service under the law passed on 24 March 2003, unless they (a) already have a basic banking service or other account with any bank, (b) have accounts or credit agreements worth at least €6,000, or (c) have committed fraud, a breach of trust, fraudulent bankruptcy, or money laundering. Consumers can choose their bank, and the bank has to provide this service, even to (non fraudulent) bankrupts. The Basic Bank Account provides the following services: deposits, crediting cheques, cash withdrawals, transfers, standing orders and direct debits. No negative balances are permitted and the bank can charge a maximum of €13.60 annually for this service (the charge in 2009). The charge is linked to the price index. The charge covers all basic banking services with a maximum of 3 manual operations a month (or 6 if no debit card is provided), plus an unlimited number of electronic transactions. A mediation service is available where xxxxx refuse to open accounts. In the first three years of operation there were over 800 complaints but most were quickly resolved.
Experience with Policy Initiative(s. Given the limited awareness of, and interest in, the issue there have so far been no policy initiatives to support access to Basic Bank Accounts and tackle financial exclusion. The reverse may in fact apply, in that the credit unions – popular banks and mutual cash desks that have operated since the Communist period, which offered an alternative form 51 Flash Eurobarometer 282. “Consumers’ Views on Switching Providers (European Commission: Brussels forthcoming) 52 DG Employment Social Affairs and Equal Opportunities. “Financial Services Provision and Prevention of Financial Exclusion” (European Commission: Brussels, 2008) 53 Financial Inclusion Observatory. “Bulgaria Synthesis Report”. Retrieved from xxxx://xxx.xxxxxx.xx/gallery/documents/country-reports/summary-per-country/synthesis-report- bulgaria.doc 54 Email from Mrs Xxxxxxxx Xxxxxxxxxxxx, Representative of the Association of Banks in Bulgaria 55 DG Health and Consumers. “Data Collection for Prices of Current Accounts provided to consumers – Final report”, Retrieved from xxxx://xx.xxxxxx.xx/consumers/rights/docs/study_bank_fees_en.pdf 56 Financial Inclusion Observatory. “Bulgaria: Level of Access from Bank Accounts for People who want it”. Retrieved from xxxx://xxx.xxxxxx.xx/countryreport,en,53,95,4,BG,145.html#433 57 Financial Inclusion Observatory, “Bulgaria Country report - stage 1”, Retrieved from xxxx://xxx.xxxxxx.xx/gallery/documents/country-reports/country-report-questionnaire-final- bulgaria.pdf of access to credit for firms– have since 1996 lost most of their client base, and a new banking law passed in 1997 placed restrictions on their activities58.
Experience with Policy Initiative(s. A legal framework exists underpinning rights to a Basic Bank Account, enacted by a law (through Parliament) and a decree enacted by government. Details are contained in Appendix E The legal framework requires a customer who is refused an account to obtain written details from the bank concerned. The customer then has to present these details to the Banque de France which will nominate a commercial bank which is required to open an account. Whilst the process can work without help from the banks,
Experience with Policy Initiative(s. In order to avoid the imposition of any binding framework, the banking industry has a vested interest in the current system working. The banking industry provides an ombudsman – free of charge – who handles complaints by individuals who have been refused a Basic Bank Account. These ombudsmen are generally retired high court judges. They are seen as neutral and autonomous bodies. Nonetheless, their judgments are non- binding and both consumer and bank may choose to ignore it. According to Banking Federation officials, around half of all cases are decided in favour of the consumer. While some of the consumers themselves will subsequently decide to go before court (presumably because they are dissatisfied with the outcome), it is practically unheard of for banks not to accept a judgment passed by the ombudsman.71 Nonetheless, consumer associations emphasise that implementation of the voluntary undertaking by the banking sector is patchy. By way of example, the Federal Agency for Work determined that in January 2006, 1.36% of its payments had gone to individuals who, despite being eligible, were without access to a Basic Bank Account.72 According to a report made by a Consumer Association in Germany to the financial committee of the German Parliament, maintenance charges for Basic Bank Accounts in 70 DG Employment Social Affairs and Equal Opportunities. “Financial Services Provision and Prevention of Financial Exclusion” (European Commission: Brussels, 2008) 71 Information obtained during interview programme. 72 xxxx://xxx.xxx.xxxx.xx/files/3d3c5863f0a7545a56a8fe6ae9909572/1298/Bericht_%20BReg- 2006 tend to be less than €10; however, some banks have tried to charge as much as €35 per month.73
Experience with Policy Initiative(s. There have to date been no policy initiatives in regard to financial exclusion, as only very limited interest in the subject has been expressed by stakeholders or the government. The focus has been more on bank charges, with a number of court decisions following customer complaints and subsequent regulation in this area.
Experience with Policy Initiative(s. In formulating economic policy, the Lithuanian government and banking sector has not much taken into account the issue of financial inclusion. There are no significant signs that the banking sector considers financial inclusion a priority for commercial banks, although recent legislation does aim to make it mandatory for workers above a certain salary to have a bank account. Private Lithuanian banks have broadly followed the good practices adopted by the Scandinavian banks operating in the country. This includes for example the widespread provision of student accounts, whereas in rural areas outside the immediate vicinity of ATM facilities many communities, particularly elderly groups, remain financially excluded. Awareness-raising activities are required in order to build trust and introduce e- commerce facilities into rural areas, but no consensus between the Lithuanian state and banking sector has been reached on where the responsibility for production of these information materials lies.
Experience with Policy Initiative(s. There are signs that the government and financial sector are looking to market-based solutions. Some private banks have started to offer young people’s bank accounts and have provided additional assistance to people with disabilities. Trials have also taken place in which state welfare is delivered via a personal bank account. These private banking initiatives have not however adequately addressed the issue of financial exclusion in rural areas, including the disadvantage faced by retired customers. Attempts have been made by banks, with limited success, to disseminate information material in order to raise public awareness.
Experience with Policy Initiative(s. While there are no policy initiatives in Spain aimed at tackling financial exclusion, a number of market-based solutions have emerged over the years. In 2004, a group of banks started to voluntarily offer current/deposit accounts including additional services (e.g. credit card, debit card, bank transfer facilities) at a flat rate (or tarifa plana).87 This scheme seems to have been crowded out of the market by more competitive options in recent years. So-called Libreta accounts, which are most similar to Basic Bank Accounts, are available for particularly vulnerable clientele.
Experience with Policy Initiative(s. The UK Banking Code, which was a voluntary code, stipulates that if a customer’s needs are suited to a Basic Bank Account and if the individual bank operates the product, the customer would be offered one. In practice however there may be conditions on accessing the Basic Bank Account, such as the need to show an address and not being an undischarged bankrupt. Also, consumer organisations suggest that the Basic Bank Account is not always offered. A Basic Bank Account may in many cases be free, particularly if salaries or wages are paid into the account. The Banking Code97 gave certain voluntary commitments about a basic bank account, as follows. Xxxxx agreed to In November 2009, many of the functions of the Code were replaced by legislation from the FSA, but this legislation does not cover basic bank accounts. A consumer guide98 produced by the FSA under its Moneymadeclear banner gives information about bank accounts. Members of the BBA, BSA and UK Cards Association have agreed to stock these guides in branches. The guide provides information but does not change the voluntary nature of what was expressed in the Code Whilst a Basic Bank Account does not offer credit facilities, in the UK banks may charge a customer a fee if (for example) the account contains insufficient funds to meet a direct debit and the direct debit is declined for payment. This fee may put the account balance into overdraft and the resulting fees charged by the bank can be significant. The UK Office of Fair Trading undertook a legal challenge to these fees but was unsuccessful. Research by the Financial Exclusion Taskforce suggests that low income households would prefer the certainty of a small fixed charge to the uncertain and larger charges for failed transactions. 97 The 2008 edition of the Code accessed from xxxx://xxx.xxx.xxx.xx/content/1/c6/01/30/85/Banking_Code_2008.pdf 98 Consumer guide accessed from xxxx://xxx.xxxxxxxxxxxxxx.xxx.xx/pdfs/bank_accounts.pdf The Post Office also offers a Post Office Card Account (POCA), which allows only the receipt of state benefits, state pensions and tax credit payments, but no other payments. According to the latest Family Resources Survey, 12 % of over-75s have a POCA.
