The banking industry in Europe was given until mid-September to come up with more transparent fees by the European Union executive. It has not done so, according to Michel Barnier, who is in charge of regulating finance for the EU; therefore, he will propose new rules to make it easier for consumers to make informed choices.
Reuters reported that a spokeswoman for Barnier said Monday, “We will propose legislation on a framework for bank fees. There has been a process for the last year to try and sort this out via self-regulation with the banking industry but it’s not worked.” She added, “We want to make it easier for Europeans to be able to choose what’s best on the market for them,” she said, commenting on bank account costs. “Now, it is very difficult for them to do so.”
Among other things, the European Commission had asked banks to use common terminology for current account services, and to inform consumers about what charges are assessed to their accounts. Currently it is difficult to compare bank account charges across Europe, which include such things as cash withdrawal fees or account maintenance fees. Complete transparency would allow customers more easily to compare charges and move to lower-cost accounts, driving competition to lower rates.
The EC can write a law that compels banks to reveal their fees; it cannot, however, cap them. While the law is expected to be proposed in 2012, it will require at least a year to work through all 27 EU nations and its parliament before it can become EU law.