EU bank law would ban di­rect debit fees from 2012

The Pak Banker - - Company& -

LONDON: Bank charges on di­rect debit trans­ac­tions would be banned from 2012 un­der a draft Euro­pean law that tar­gets France, Italy and Spain as part of ef­forts to cut the cost of pay­ing bills for con­sumers and busi­nesses.

EU In­ter­nal Mar­ket Com­mis­sioner Michel Barnier un­veiled a draft law on Thurs­day to set dead­lines for mi­grat­ing 27 na­tional pay­ments sys­tems to a sin­gle euro pay­ments area (SEPA).

Fix­ing a date ratch­ets up pres­sure on banks to update their sys­tems and speed up the move to SEPA that be­gan in 2008.

The reg­u­la­tion is ex­pected to be ap­proved by EU states and the Euro­pean Par­lia­ment into law, though mi­nor changes are pos­si­ble.

"The pro­posal adopted to­day fixes end-dates to make this pan-Euro­pean sys­tem a re­al­ity, hope­fully as early as 2012," Barnier said.

Un­der the SEPA sys­tem, a con­sumer or busi­ness with one euro-de­nom­i­nated bank ac­count would be able to make credit trans­fers and di­rect deb­its in eu­ros do­mes­ti­cally or to any other EU coun­try.

The draft mea­sure pro­poses ban­ning in­ter­change fees for na­tional and cross-border di­rect deb­its af­ter the end of Oc­to­ber 2012. Bank­ing sys­tems in Spain, France, Swe­den, Bel­gium, Por­tu­gal and Italy oblige a payee, such as a util­ity com­pany, to pay the bank of the con­sumer or busi­ness a hid­den fee for di­rect debit trans­ac­tions. "As they are agreed col­lec­tively be­tween banks and have an im­pact on prices, these mul­ti­lat­eral in­ter­change fees raise con­cerns about their ef­fect on com­pe­ti­tion," the Euro­pean Com­mis­sion said in a memo. - PB News

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