Published legislation and draft legislation - Spain
Transposition of the Directive on basic payment accounts and related fees
Royal Decree 19/2017, 24 November
The Council of Ministers has passed Royal Decree 19/2017 on basic payment accounts, payment account switching and comparability of fees. This regulation is a transposition* of the European Parliament and the Council’s Directive 2014/92/EU of 23 July 2014, on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features.
EU Directive 2014/92 has a triple purpose: in the first place to make access to banking services easier; secondly, to improve the transparency and comparability of fees set on payment accounts; and finally, to make it easier to switch payment accounts.
The explanatory introduction to the Royal Decree outlines its scope to include basic payment accounts, defined**as accounts opened in the name of one or several consumers that are used to execute payment transactions and that are set up as a standard financial product.
Basic payment accounts are in euros and the basic banking services they can handle are: use and closure of the account, paying in funds, cash withdrawal -both in the institution’s own branches and in ATMs located in the EU-, direct debits, using debit cards and making transfers.
The purpose of these financial products is to increase financial inclusion. For these effects, additional services do not have to be purchased; this right to access is recognized for EU residents, asylum seekers or those who, despite not having a residency permit, cannot be expelled. To enforce this right, credit institutions may only refuse access in the following circumstances: when the client does not provide the information required under the Anti-Money Laundering and Financing of Terrorism Act (AMLFT); when opening an account would breach national security or public order; or when the client already has an account that enables them to access the same services as those provided by payment accounts.
Furthermore, the regulation transposing the Directive ensures that payment accounts are switched*** efficiently and swiftly–including to other countries – in a maximum of 13 days – and sets a maximum of 24 hours for closing them unless the client has another financial product that necessitates a payment account to be maintained with the supplier.
Another area covered for the first time by the law is the regulation of the fees connected with payment accounts. These fees are freely agreed between institutions and clients, although the maximum amounts that payment service providers can charge will be set by the Ministry for the Economy, Industry & Competitiveness. In addition, the regulations make it possible to create more favorable conditions for clients in situations of vulnerability or at risk of financial exclusion.
Consistent with the purpose of regulating the transparency and comparability of fees charged to payment account clients, the Royal Decree establishes a series of information requirements. Payment service providers must provide their clients, in good time, with a document explaining the fees, as well as a list of all the fees they have incurred for the services linked to a payment account. With the same aim in mind, the Decree makes provision for a Bank of Spain website comparing the fees applied by payment service providers.
In terms of to whom the law will apply, the Royal Decree affects natural persons acting in a non-commercial, business or professional capacity, excluding those capacities. With respect to the service suppliers, the scope of application depends on the matter under regulation. In the case of comparability of payment account services and fees or switching payment accounts, the payment service suppliers are regulated, whereas in the provision of basic payment account services, the scope of application narrows down to credit institutions only.
Finally, the Royal Decree not only amends Act 16/2009, 13 September, on payment services, but removes the Instituto de Crédito Oficial (ICO) from the scope of the regulation’s application and provides for a transition period so that the Bank of Spain can develop the supporting legislation on fee comparability.
*The deadline for transposition was 18th September 2016.
**As defined in Art. 2.1 of Directive 2014/92/EU.
***Article 2.18 of the Directive defines “switching” as transferring, at the consumer’s request, from one payment services provider to another either the information about all or some standing orders for credit transfers, recurring direct debits and recurring incoming credit transfers executed on a payment account, or any positive payment account balance from one payment account to the other, or both, with or without closing the former payment account.