Recomendaciones Específicas

Considering the vulnerable status of low-income customers, the charges for using banking services shall also be monitored. The use of bank accounts must not lead

402

Standing Committee of Shenzhen, ‘Announcement for Public Opinions About ‘Regulation of Residence Permits of Shenzhen SEZ (approach Version of the Amended Draft)’ (2014)

to further financial difficulties for low- income customers. This is possibly the most direct way of facilitating low- income customers in using banking services, as they are sensitive to the charges and are usually unable to defend their interests through ombudsman services or lawsuits.

2.3.3.1 The United Kingdom

Since current and basic bank accounts in the UK are distinct based on the overdraft facility, the fees charged for two types of accounts are also different. For customers who use basic bank accounts there is usually no overdraft choice and therefore they are free from overdra ft charges.403However, using basic banking services is still not totally free of charge; unarranged overdrafts or failed payments may still cause unexpected charges.

On this issue, the recent agreement between the UK government and several major banks is proposed to provide truly cost- free basic bank accounts. First, by confirming that a basic account will not have arranged overdraft facilities, the agreement minimizes customer’s chances of suffering from overdraft charges.404 Customers will not be charged for overdrawn balances in their accounts. Unpaid payment will also be free of charge; failing to pay a direct debit or standing order through a basic account,405 for example, will no longer penalise customers with high charges. However, apart from the overdraft facility, customers could still make full use of basic bank account with the same standard features (transacted in pounds sterling) of current accounts free of charge. Therefore, banks will not discriminate against customers with basic accounts and limited account functions or will not charge additional fees. The protection of vulnerable customers is clearly the intention as reflected here.

2.3.3.2 China

403

Although basic bank accounts do not have an overdraft facility, there is still a chance of customers being overdrawn. For example, customers may be faced with an unarranged overdraft when withdrawing money from an automated teller machine due to note denominations . See HM Treasury ‘Revised Basic Bank Account Agreement’ (n 317). As a reference, overdraft charges were criticized for being complex and not transparent by OFT in 2008, and regulatory measures have since then been taken by OFT. The FCA is also looking at the problem and proposes to make some change in the current regulatory regime. See FCA, ‘Overdrafts’ (2014)

<http://www.fca.org.uk/firms/firm-types/consumer-credit/consumer-credit-research/overdrafts> accessed 31 January 2015.

404

HM Treasury ‘Revised Basic Bank Account Agreement’ (n 317).

Since bank accounts or common debit cards do not have an overdraft feature, the consideration of the regulator is mainly focused on the charges for using banking services.

In 2011, several authorities issued a regulation to waive several types of charges on banking services.406 Although the starting point of this fee waiver decision is to ‘raise the efficiency and quality of bank’s service and take social responsibility on the basis of marketisation’,407 it could indeed benefit low- income account holders. Under this regulation, several services of RMB personal accounts are now free of charge; this covers account opening and closing, making deposits, withdrawing and transferring money within the same city, changing a personal identity number or ‘PIN’, account annual fee, management fee of social security accounts,408 receiving bank statements and so forth.

Although all clients would benefit from this regulatory change, it improves the availability of banking services among the vulnerable group. This is especially the case in the waiving of ‘management fees of social security account[s] with small balance[s]’, as the previous industry practice was to charge 3 Chinese yuan (UK$0.5) for accounts with balances less than 300 yuan (US$50) every quarter.409 The accusation was levelled that profit was being made from those who lived on government transfer payments with little savings in their accounts. Earlier than this regulation, the industry association urged its member banks to waive fees for social security accounts but received little response.410 Furthermore, for card holders of ‘rural migrant bank cards’, the PBoC has capped the fee charged for money withdrawal.411 A mandatory regulation rather than voluntary conduct standard in this case is therefore more effective, it is compulsory for all the banking institutions in the country to abide by the CBRC Notice.

406

CBRC, PBoC, National Development and Reform Commission,关于银行业金融机构免除部 分服务收费的通知 [Notice on the Waiver of Some Service Charges of Banking Financial Institutions, guanyuyinhangyejinrongjigoumianchubufenfuwushoufeidetongzhi] (2011 No. 22).

407

Ibid.

408

Including bank accounts for receiving pensions, minimum subsistence allowances, medicare, unemployment insurance and so forth.

409

See a news report for example, ‘Bank Urged to Lower Petty Fees’ (2010) <http://en.people.cn/90001/90778/90859/7233946.html> accessed 26 April 2015.

410

China Banking Association, 关于加强银行服务收费自律工作的六点共识 [Six Dimensions to Enhancing Bank’s Self-Regulation on Service Charges,

guanyujiaqiangyinhangfuwushoufeizilvgongzuodeliudiangongshi]

However, this notice also has drawbacks. The management fee it has waived only includes social security accounts rather than general personal accounts. There is therefore still a regulatory vacuum to a large degree. People would still be charged for their RMB savings or settlement account with a small balance. Although the industry association argues that this management fee for personal accounts with small balances is aimed at cutting down on the unused account number and hence save the resources of commercial banks,412 it would indeed harm vulnerable customers who could not save more money in their accounts.