What are the walls that the most vulnerable in Europe find when opening bank accounts?

In Romaniaabout three out of 10 People over 15 years of age did not have a bank account in 2021, while in Bulgaria and Hungary the number of unbanked people ranged between 12% and 16%.

“Given the still high number of unbanked people in the EU, as well as the high number of vulnerable consumers in general, it is important that there are strict rules to ensure vulnerable consumers have easy access to an affordable basic bank account,” the report states.

In 2014, The EU introduced the so-called ‘Payment Accounts Directive’a legislative text designed to ensure that all citizens of the bloc have the right to a basic bank account that allows them to make payments online, withdraw cash from ATMs and even go into overdraft.

However, 10 years later, many vulnerable EU consumers they keep encountering obstacles to access basic bank accounts, which allow them to collect a salary or a social benefit, pay the rent or taxes, or access other financial services such as pension products, according to the report.

Among the reasons cited are the insufficient awareness campaignsaffordability, documentation and excessive deterrence measuresas well as the reluctance of financial institutions to offer and inform consumers about these products.

Shadow economy or a new paradigm?

In RomaniaFor example, banks proactively offered these basic accounts in about three in 10 cases, and although they are supposed to be free for vulnerable consumers, in practice the accounts are sometimes sold as part of a package with additional services, according to The report.

For the Romanian Banking Association (ARB), the low level of financial inclusion is partly explained by another figure: “In 2021, the submerged economy represented 24% of Romania’s GDP, the seventh highest value in the European Union“, declared the organization to ‘Euronews’ in a statement.

The European Consumer Organization (BEUC) has a different opinion.

“With the decrease in the supply of bank branchesand cash services, financial institutions are making it difficult to access basic banking services,” said Anna Martin, head of financial services at BEUC, adding that “even compared to normal bank accounts, the price of basic bank accounts in many countries It is very high“.

In Germanya basic payment account costs up to 27.83 euros per month, in Denmark 13 euros and in Finland 10 euros, while in other countries, such as Spainis free if the consumer’s gross household income is less than 25,200 euros per year.

“Essential service”

The 2014 directive included provisions for Member States to ensure that credit institutions offered the productse free of charge or for a reasonable feebut so far it has not been clarified what could be considered reasonable in this case.

“Since a payment account It is an essential service, it should not be prevented these consumers to have an account as constituting a substantial financial sacrifice,” the report states.

The homeless and the refugees are also covered by the directive, which applies to all citizenss of the EU, although in practice bureaucracy and the lack of proper identification documents make it difficult for them to open or maintain these accounts.

“The banks make it difficult for certain groups of consumers to access a bank accountlike refugees, supposedly to prevent money laundering,” Martin stressed.

Homeless people face a similar situation, as there are clear differences between Member States when it comes to interpret the need to guarantee the product to those who lack an address or adequate documentation.

A pan-European problem

Freek Spinnewijn, director of the European Federation of National Organizations Working with the Homeless (FEANTSA), told ‘Euronews’ that the lack of “proof of address” remains an obstacle for homeless people to access a bank account.

In FranceBulgaria, Latvia and the Czech Republic do not expressly mention exemption from the need to provide an address to open a basic bank account.

“Although legislation adopted by many Member States should eliminate this problem, In practice, banks reject people who cannot provide a document in which a permanent address appears,” says FEANTSA in its latest analysis of the directive.

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A problem that, however, could be solved by introducing a provision in the PAD so that those consumers who do not have the appropriate documentation can open a basic bank account with stricter control requirements and more limited benefits.

“This is a problem pan-europeanthat is why we advocate a pan-European solution,” stressed Peter Norwood, senior researcher at ‘Finance Watch’, at the presentation of the report.

However, any solution will have to wait until the next termsince the indicative agenda of the Community Executive until the beginning of July does not foresee any action in this area.