Published and draft legislation - Spain

Basic payment accounts to help vulnerable people and those at risk of financial exclusion

Royal Decree 164/2019

On 3 April, Royal Decree 164/2019 was passed, establishing a system of free basic payment accounts to help vulnerable people and those at risk of financial exclusion.

The regulation is a consequence of the requirements in EU Directive 2014/92[1], the transposition of which began with Royal Decree 19/2017, 24 November, as discussed in Progreso 13, which sets out two fee bands: a general one (clients have to pay a maximum monthly fee which remunerates the institution for the costs it incurs) and another less costly rate (for vulnerable groups and those at risk of financial exclusion).

In the case of the first fee band, Ministerial Order ECE/228/2019, 28 February, sets the maximum fee at EUR 3 per month to cover the most common transactions: opening, using and closing an account, paying in cash (in Euros), withdrawing cash in Euros from the institution's branch offices and ATMs in the Member States of the European Union, and payment transactions using a debit or prepaid card, among others. Furthermore, the Order authorizes the institution to pass on to the client any fees incurred from cash withdrawals from other institutions' ATMs, pursuant to the second additional provision of Royal Decree 19/2018, 23 November, on payment services and other urgent measures on financial matters, as covered in Progreso 17.

Royal Decree 164/2019 regulates the second fee band, such that the most vulnerable population group can access these accounts free of charge to receive the services indicated in Art 4.2 of this Order, as described above. The main areas covered in the Decree are as follows:

Special situation of vulnerability or at risk of financial exclusion

This will apply when:

  • Gross annual income per family unit does not surpass certain thresholds[2] of the public revenue index (IPREM in the Spanish acronym).
  • Members of the family unit have neither direct or indirect ownership nor any rights over real estate goods apart from their primary residence, nor do they own any private companies.

Proof of status

The client or credit institution in question must provide proof of this situation pertaining to all people in the family unit by providing: an official family record, income declaration, the last three pay checks received, a certificate from the administrative body of unemployment subsidies received, or similar.

Document informing the client whether free service has been awarded or refused

Institutions must inform their clients as to whether free service has been awarded or refused within 30 days after the client provides the information requested by that institution. If the institution does not reply, this will be understood as acceptance of the client's free status.

Duration of the free service

The service will be free of charge for 2 years, starting from when it became effective, unless the institution demonstrates that the client is no longer in vulnerability or at risk of financial exclusion, and may be extended for a further two years, provided this situation is shown to be unchanged.

Storage period of documents

Credit institutions must store all the documents provided by clients for 6 years, independently of whether free service is offered or not.

[1] On the possibility of comparing fees for payment accounts, the transfer of payment accounts and access to basic payment accounts establishes the right of everyone to a basic payment account and also that member states may require credit institutions to apply more favorable terms to vulnerable consumers as a way of promoting social inclusion within the EU's financial products market.

[2] -Twice the 12-payment IPREM total, applicable at the time of making the application when it concerns people who are not members of any family unit.

- Two and a half multiples of this indicator when the people concerned are members of a family unit with fewer than four members.

- Three times this indicator when the family units concerned contain four or more members or have acknowledged "large family" status in line with current regulations.

-Three times the indicator in the case of family units containing a person with a disability level of 33% or higher, as officially recognized in a resolution issued by the Institute for the Elderly and Social Services or by the equivalent devolved regional body.