Response to consultation on Technical Standards on standardised terminology and disclosure documents under the PAD
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This can be illustrated by the example of cash withdrawals: if this refers only to cash withdrawals made in the branch office or by debit card at a bank or bank network ATM, then the broad definition is accurate. However, as soon the reporting requirements are extended to third-party fees for domestic cash advances at third-party ATMs or our fees on cash advances at foreign ATMs – which we do not recommend – then a single line item for all cash withdrawals without any further breakdown would not make sense to consumers or give them the intended transparency. The example of cash withdrawals shows that when the EBA has extensive requirements relating to individual services, these items must also be explicitly reported in order to avoid consumer questions and misunderstandings. We understand from the commentary provided by the EBA in its consultation paper that the method of integration of the standardised terminology into national lists remains uncertain and that how this is done could impact the way in which fees are presented and described in the FID and SOF documents.
It should be made clear that “direct debit” refers to payer (and not payee-initiated) direct debits. The focus of the Directive and the recipient of the Statement of Fees is the consumer.
We would request clarity as to whether “standing order” refers to the process of setting up, changing, deleting, or just processing a standing order. As drafted at present, it seems to include only the transfer itself, however as an account provider we have separate fees attaching to the transfer as well as the setting up, amending or removal of a standing order. Therefore some clarity in this area would be helpful. As banks may have differential fees depending on the channel (physical branch service, self-service terminal, telephone, online banking), we would suggest that only the most commonly used channel should be referenced to avoid a long list of differential fees.
The use of the word Girocard in the German language list needs to be amended to ensure the full scope of debit cards are included. The definition in the Annex uses English terms to distinguish a “debit card” with an immediate charge and a “credit card” with a delayed charge. This matches the translations of “Debitkarte” and “Kreditkarte” used in Austria. The version for Germany, on the other hand, refers explicitly to “Girocard” and not “debit card,” which ultimately limits the products and does not include Maestro, V-Pay, or MasterCard Debit. These cards are not credit cards either, however, so they would not be covered if the translation of the German version is kept. It is essential that “Girocard” be replaced with “Debitkarte” in the German version.
The definition with regard to credit cards includes a reference to the fact that the use of a credit card is a form of borrowing money. Under the terms and conditions for credit cards that are relatively standardised throughout Germany, a credit card in the form of a charge card does not provide an additional loan, it only provides an availability to funds whose use is contingent upon payment of charges by the due date.
Only a revolving credit card actually offers an (additional) credit limit. This means that the Annex with the German version (“... A credit agreement between the provider and client stipulates whether the client is charged interest for using the credit”) is also incompatible with the reality in the German market. There is no credit agreement with a charge card.
Either a further distinction must be made between charge card and revolving credit card, or the focus on “borrowing money, credit agreement” must be corrected. Otherwise, the term “credit card” is given a totally inappropriate emphasis for the German market.
The terms that are used should be clear and unambiguous from the client perspective. See above in relation to direct debits and overdrafts.
In some instances, the service is not limited to payment accounts. The question then arises as to whether the standard terms have to be applied when the service is provided separate to a payment account. We would request clarity on this point.
As described above in relation to debit cards, we believe that it will be necessary, especially in the German context, to depart from the language specifications. It would be more appropriate if the service of “account overdraft” was described as “approved account overdraft” given the definitional description provided by the EBA.
For credit cards we assume that no other fee for using the credit card other than the annual fee should be included in the Statement of Fees, since the card agreement should be seen as a separate agreement alongside the payment account and our account models are also available without a credit card.
For transactions we would request the following clarifications:
We assume that reporting is required only for fees from the use of the payment account within the SEPA (for funds transfers, card payments, etc).
We assume that the frequency of the calculation only needs to be indicated if a fee is incurred.
We assume that it is necessary to report our own differentiations as soon as they affect the amount of the calculated fee (such as paper vs. paperless funds transfers).
The proposal is extremely prescriptive regarding the format and layout of the document. Under the layout proposal in its current form, consumers would receive an “unbranded” layout that does not match the corporate design they already know. This could confuse consumers. It would take more time and money to explain to consumers why their personal account information is not presented in the corporate design of the bank they know and recognise.
Each account provider’s corporate design should be able to be applied within the structure of the FID proposal. Each provider should also be able to use its own font size (as long as above a certain minimum size) – the current proposals for font size in the FID require more paper consumption than necessary.
In client communications, the corporate symbol/logo is generally placed on the right-hand side of the document. To ensure that clients can identify the source of information at a glance, the requirement that the common symbol always be placed on the right-hand side of the document (Article 1(2)(b)) should be abandoned. Account providers should be free to decide for themselves where on the document they wish to place the common symbol.
The Delegated Regulation should also clarify that, for environmental considerations, it is acceptable to use both the front and back of the page.
We welcome the fact that the “package of services” line after Article 7(6) can be deleted if this service is not offered or is part of the fee for any general account service. Article 9 “Additional information” should clarify that the table in the FID template can be deleted without substitution if the payment service provider holding the account does not report any services and fees here.
It is important that not all account provider mailings are in colour (for cost reasons), so it should be permissible to print the symbol in black and white alongside a colour version of the account providers logo.
We have concerns about the length of the document and the implications for the environment. The document could run to multiple pages in length which, in addition to not being very consumer friendly, would result in the use of a lot of paper.
Further, the EBA’s symbol on the document is in the same location where banks typically place their own corporate logos. We have defined templates that always have the Deutsche Bank logo or the logo of the subsidiaries in the upper right-hand corner. We would suggest to give providers discretion over the positioning of the EBA’s and their own logos.
The draft instructions in Articles 2-11 largely take this approach. But there are a few points that require clarification, in keeping with some of the remarks already mentioned above:
Article 2, Statement of Fee: In client communications, the corporate symbol/logo is generally placed on the right-hand side of the document. To ensure that clients can identify the source of information at a glance, the requirement that the “common symbol” always be placed on the right-hand side of the document should be abandoned.
Article 2: The Delegated Regulation should clarify that, for environmental considerations, it is acceptable to use both the front and back of the page (“duplex printing”).
Article 3, logo of payment service provider: Does the logo need to be framed by the box shown in the template?
Article 3, logo of payment service provider: The logo can be displayed in colour, even if the common symbol is displayed in colour. It’s important to us that for cost control purposes we also be allowed to display the logo in black and white. This should be reflected.
Further to the comments made on the FID above, account providers today have generally already introduced a standardised, consumer-friendly layout for all documents (account statements, securities statements, forms, etc.) based on their own branding. Under the layout proposal in its current form, consumers would receive an “unbranded” layout that does not match the corporate design they already know. This could confuse consumers. It would take more time and money to explain to consumers why their personal account information is not presented in the corporate design of the bank they recognise. DB clients already receive several EBA price information notices in our corporate design enclosed with their quarterly payment account statements. These notices would then appear in a different layout in the annual Statement of Fees. This could again lead to consumer confusion.
We feel that the overemphasis on headers and categorisation through grey shading and a large font size prevents consumers from quickly taking in the numbers. The layout in the EBA proposal forces the client to read vertically instead of horizontally, making it harder to identify what the numbers refer to. The Statement of Fees layout also creates a contradiction in what is relevant by overemphasizing categories while shrinking and underemphasizing client data. The layout also fails to differentiate various hierarchies, making it harder for consumers to gain a clear orientation.
The excessively large font sizes also lead to higher paper consumption especially when there is a lot of information (as is required when reporting changes to interest charges on overdrafts and interest payments on balances – when the ECB adjusts interest rates several times a year, for example). The regular font sizes that banks use in their own corporate design should therefore be adequate. Based on the draft specifications for the Statement of Fees in the consultation paper, we estimate this would come to at least three pages per client for one annual Statement of Fees. This leads to increased paper consumption, especially with clients that use many different services that by regulation must be reported. For this reason, we recommend using smaller font sizes than currently proposed and allowing banks to use their internal specifications, which our clients are already familiar with now, in order to save paper. (Of course, large-print information could be made available upon request for consumers with visual impairment.) Production and postage costs would also rise accordingly if paper consumption increases.
It would be very consumer-friendly if clients could receive their SoF together with their account statement or another payment account document that is regularly sent out to clients. This way, clients would not receive more individual documents than strictly necessary. Combining documents would also open up the possibility of saving postage costs, which are often passed along to the client. We assume there is nothing in the PAD which restricts account providers from sending multiple documents simultaneously. We also assume that the standard way for distributing the Statement to the consumer will be online communications, as the Directive (Art 5 (1)) states that provision on paper will be on the consumer’s request. In general, we would encourage the EBA to communicate to Member States that remaining legal hurdles to electronic client communications need to be overcome to foster digital banking.
The requirement for various colour patterns for headers and sub-headers would also prevent the payment service providers from offering the SoF through an account statement printer. For this reason, we propose an exemption if (and only if) the payment service provider and consumer agree that the SoF can be provided through an account statement printer.
The draft instructions in Articles 2-16 largely take this approach. However, there are a few points that require clarification (similar to the points already outlined on the FID):
Article 2 Statement of Fee: In client communications, the corporate symbol/logo is generally placed on the right-hand side of the document. To ensure that clients can identify the source of information at a glance, the requirement that the “common symbol” always be placed on the right-hand side of the document should be abandoned.
Article 2: The Delegated Regulation should clarify that, for environmental considerations, it is acceptable to use both the front and back of the page (“duplex printing”).
Question 1: Do you agree with the EBA’s decision to take a broad approach to defining ‘service’? Please explain your reasoning.
Deutsche Bank understands the complex challenge for the EBA of defining “services” and the advantages the EBA sees in the broader definition for the term “services”. However, whenever a broad definition encompasses too many individual services, we see a potential for client complaints and inquiries, which we would like to avoid. Depending on which services and how many services are actually grouped together under a single point, it’s important to assess whether the broad definition is transparent enough for the consumer.This can be illustrated by the example of cash withdrawals: if this refers only to cash withdrawals made in the branch office or by debit card at a bank or bank network ATM, then the broad definition is accurate. However, as soon the reporting requirements are extended to third-party fees for domestic cash advances at third-party ATMs or our fees on cash advances at foreign ATMs – which we do not recommend – then a single line item for all cash withdrawals without any further breakdown would not make sense to consumers or give them the intended transparency. The example of cash withdrawals shows that when the EBA has extensive requirements relating to individual services, these items must also be explicitly reported in order to avoid consumer questions and misunderstandings. We understand from the commentary provided by the EBA in its consultation paper that the method of integration of the standardised terminology into national lists remains uncertain and that how this is done could impact the way in which fees are presented and described in the FID and SOF documents.
Question 2: Do you consider the services that the EBA has selected for standardised terms and definitions to be suitable to achieve the aims of the Directive? Please explain your reasoning.
We partially agree with the services that the EBA has selected for standardised terms and definitions.It should be made clear that “direct debit” refers to payer (and not payee-initiated) direct debits. The focus of the Directive and the recipient of the Statement of Fees is the consumer.
We would request clarity as to whether “standing order” refers to the process of setting up, changing, deleting, or just processing a standing order. As drafted at present, it seems to include only the transfer itself, however as an account provider we have separate fees attaching to the transfer as well as the setting up, amending or removal of a standing order. Therefore some clarity in this area would be helpful. As banks may have differential fees depending on the channel (physical branch service, self-service terminal, telephone, online banking), we would suggest that only the most commonly used channel should be referenced to avoid a long list of differential fees.
The use of the word Girocard in the German language list needs to be amended to ensure the full scope of debit cards are included. The definition in the Annex uses English terms to distinguish a “debit card” with an immediate charge and a “credit card” with a delayed charge. This matches the translations of “Debitkarte” and “Kreditkarte” used in Austria. The version for Germany, on the other hand, refers explicitly to “Girocard” and not “debit card,” which ultimately limits the products and does not include Maestro, V-Pay, or MasterCard Debit. These cards are not credit cards either, however, so they would not be covered if the translation of the German version is kept. It is essential that “Girocard” be replaced with “Debitkarte” in the German version.
The definition with regard to credit cards includes a reference to the fact that the use of a credit card is a form of borrowing money. Under the terms and conditions for credit cards that are relatively standardised throughout Germany, a credit card in the form of a charge card does not provide an additional loan, it only provides an availability to funds whose use is contingent upon payment of charges by the due date.
Only a revolving credit card actually offers an (additional) credit limit. This means that the Annex with the German version (“... A credit agreement between the provider and client stipulates whether the client is charged interest for using the credit”) is also incompatible with the reality in the German market. There is no credit agreement with a charge card.
Either a further distinction must be made between charge card and revolving credit card, or the focus on “borrowing money, credit agreement” must be corrected. Otherwise, the term “credit card” is given a totally inappropriate emphasis for the German market.
Question 3: Do you consider the drafting decisions taken by the EBA for the standardised terms and definitions, and the resultant provisions in Recitals of the draft RTS, to be suitable for achieving the aims of the Directive of enhancing transparency and comparability? Please explain your reasoning.
We agree with the EBA’s approach of avoiding specialised legal terminology wherever possible since consumers do not always understand it.The terms that are used should be clear and unambiguous from the client perspective. See above in relation to direct debits and overdrafts.
Question 4: Do you consider the terms and definitions proposed by the EBA in the Annexes to the draft RTS, and the resultant provisions in the Recitals of the draft RTS, to be adequate for achieving the aims of the Directive of enhancing transparency and comparability? If not, please provide alternative terms and definitions and their underlying rationale.
We think there is still room for improvement in the standardised terms and definitions proposed by the EBA and the resultant provisions of the draft RTS.In some instances, the service is not limited to payment accounts. The question then arises as to whether the standard terms have to be applied when the service is provided separate to a payment account. We would request clarity on this point.
As described above in relation to debit cards, we believe that it will be necessary, especially in the German context, to depart from the language specifications. It would be more appropriate if the service of “account overdraft” was described as “approved account overdraft” given the definitional description provided by the EBA.
For credit cards we assume that no other fee for using the credit card other than the annual fee should be included in the Statement of Fees, since the card agreement should be seen as a separate agreement alongside the payment account and our account models are also available without a credit card.
For transactions we would request the following clarifications:
We assume that reporting is required only for fees from the use of the payment account within the SEPA (for funds transfers, card payments, etc).
We assume that the frequency of the calculation only needs to be indicated if a fee is incurred.
We assume that it is necessary to report our own differentiations as soon as they affect the amount of the calculated fee (such as paper vs. paperless funds transfers).
Question 5: Do you consider the FID template that is being proposed in the draft ITS and its Annex to be suitable to achieve the aims of the Directive? Please explain your reasoning.
We feel that the FID can still be improved in a number of ways. The proposal is extremely prescriptive regarding the format and layout of the document. Under the layout proposal in its current form, consumers would receive an “unbranded” layout that does not match the corporate design they already know. This could confuse consumers. It would take more time and money to explain to consumers why their personal account information is not presented in the corporate design of the bank they know and recognise.
Each account provider’s corporate design should be able to be applied within the structure of the FID proposal. Each provider should also be able to use its own font size (as long as above a certain minimum size) – the current proposals for font size in the FID require more paper consumption than necessary.
In client communications, the corporate symbol/logo is generally placed on the right-hand side of the document. To ensure that clients can identify the source of information at a glance, the requirement that the common symbol always be placed on the right-hand side of the document (Article 1(2)(b)) should be abandoned. Account providers should be free to decide for themselves where on the document they wish to place the common symbol.
The Delegated Regulation should also clarify that, for environmental considerations, it is acceptable to use both the front and back of the page.
We welcome the fact that the “package of services” line after Article 7(6) can be deleted if this service is not offered or is part of the fee for any general account service. Article 9 “Additional information” should clarify that the table in the FID template can be deleted without substitution if the payment service provider holding the account does not report any services and fees here.
It is important that not all account provider mailings are in colour (for cost reasons), so it should be permissible to print the symbol in black and white alongside a colour version of the account providers logo.
We have concerns about the length of the document and the implications for the environment. The document could run to multiple pages in length which, in addition to not being very consumer friendly, would result in the use of a lot of paper.
Question 6: Do you consider the common symbol in the FID template that is being proposed in the draft ITS and its Annex suitable to achieve the aims of the Directive? Please explain your reasoning.
Although we acknowledge the requirements of the Directive, the symbol proposed by the EBA does not provide consumers with any additional information of relevance that they need to understand the contents of the document.Further, the EBA’s symbol on the document is in the same location where banks typically place their own corporate logos. We have defined templates that always have the Deutsche Bank logo or the logo of the subsidiaries in the upper right-hand corner. We would suggest to give providers discretion over the positioning of the EBA’s and their own logos.
Question 7: Do you consider the proposed instructions for the completion of the FID template contained in Articles 2 to 11 of the draft ITS, to be suitable to achieve the aims of the Directive? Please explain your reasoning.
It is important that the fee information document be easy to generate and contain clear instructions on how the document is to be completed.The draft instructions in Articles 2-11 largely take this approach. But there are a few points that require clarification, in keeping with some of the remarks already mentioned above:
Article 2, Statement of Fee: In client communications, the corporate symbol/logo is generally placed on the right-hand side of the document. To ensure that clients can identify the source of information at a glance, the requirement that the “common symbol” always be placed on the right-hand side of the document should be abandoned.
Article 2: The Delegated Regulation should clarify that, for environmental considerations, it is acceptable to use both the front and back of the page (“duplex printing”).
Article 3, logo of payment service provider: Does the logo need to be framed by the box shown in the template?
Article 3, logo of payment service provider: The logo can be displayed in colour, even if the common symbol is displayed in colour. It’s important to us that for cost control purposes we also be allowed to display the logo in black and white. This should be reflected.
Question 8: Do you consider the proposed instructions for the completion of the FID template contained in Articles 2 to 11 of the draft ITS, to be clear and easy to follow? Please explain your reasoning.
See response to Q7.Question 9: Do you consider the SoF template that is being proposed in draft ITS and its Annex to be suitable to achieve the aims of the Directive? Please explain your reasoning.
The Payment Accounts Directive (PAD) stipulates that a Statement of Fees should be a short, standalone document “presented and laid out in a way that is clear and easy to read” (Article 5(3) PAD). The result of the layout requirements specified here (such as those for font size), however, is that the printed copies account providers send to clients will have more sheets of paper than is necessary to fulfil the PAD requirements or the stated regulatory aim of clear and comparable information.Further to the comments made on the FID above, account providers today have generally already introduced a standardised, consumer-friendly layout for all documents (account statements, securities statements, forms, etc.) based on their own branding. Under the layout proposal in its current form, consumers would receive an “unbranded” layout that does not match the corporate design they already know. This could confuse consumers. It would take more time and money to explain to consumers why their personal account information is not presented in the corporate design of the bank they recognise. DB clients already receive several EBA price information notices in our corporate design enclosed with their quarterly payment account statements. These notices would then appear in a different layout in the annual Statement of Fees. This could again lead to consumer confusion.
We feel that the overemphasis on headers and categorisation through grey shading and a large font size prevents consumers from quickly taking in the numbers. The layout in the EBA proposal forces the client to read vertically instead of horizontally, making it harder to identify what the numbers refer to. The Statement of Fees layout also creates a contradiction in what is relevant by overemphasizing categories while shrinking and underemphasizing client data. The layout also fails to differentiate various hierarchies, making it harder for consumers to gain a clear orientation.
The excessively large font sizes also lead to higher paper consumption especially when there is a lot of information (as is required when reporting changes to interest charges on overdrafts and interest payments on balances – when the ECB adjusts interest rates several times a year, for example). The regular font sizes that banks use in their own corporate design should therefore be adequate. Based on the draft specifications for the Statement of Fees in the consultation paper, we estimate this would come to at least three pages per client for one annual Statement of Fees. This leads to increased paper consumption, especially with clients that use many different services that by regulation must be reported. For this reason, we recommend using smaller font sizes than currently proposed and allowing banks to use their internal specifications, which our clients are already familiar with now, in order to save paper. (Of course, large-print information could be made available upon request for consumers with visual impairment.) Production and postage costs would also rise accordingly if paper consumption increases.
It would be very consumer-friendly if clients could receive their SoF together with their account statement or another payment account document that is regularly sent out to clients. This way, clients would not receive more individual documents than strictly necessary. Combining documents would also open up the possibility of saving postage costs, which are often passed along to the client. We assume there is nothing in the PAD which restricts account providers from sending multiple documents simultaneously. We also assume that the standard way for distributing the Statement to the consumer will be online communications, as the Directive (Art 5 (1)) states that provision on paper will be on the consumer’s request. In general, we would encourage the EBA to communicate to Member States that remaining legal hurdles to electronic client communications need to be overcome to foster digital banking.
The requirement for various colour patterns for headers and sub-headers would also prevent the payment service providers from offering the SoF through an account statement printer. For this reason, we propose an exemption if (and only if) the payment service provider and consumer agree that the SoF can be provided through an account statement printer.
Question 10: Do you consider the common symbol that is being proposed in the draft ITS and its Annex to be suitable to achieve the aims of the Directive? Please explain your reasoning.
Please see our feedback under question 6.Question 11: Do you consider the proposed instructions for payment services providers on how to complete the SoF template contained in Articles 2 to 16 of the draft ITS, to be suitable to achieve the aims of the Directive? Please explain your reasoning.
We welcome Description 7 in the implementation regulation, which states that the Fee Information Document must be easy to generate and contain clear instructions on how the document is to be completed.The draft instructions in Articles 2-16 largely take this approach. However, there are a few points that require clarification (similar to the points already outlined on the FID):
Article 2 Statement of Fee: In client communications, the corporate symbol/logo is generally placed on the right-hand side of the document. To ensure that clients can identify the source of information at a glance, the requirement that the “common symbol” always be placed on the right-hand side of the document should be abandoned.
Article 2: The Delegated Regulation should clarify that, for environmental considerations, it is acceptable to use both the front and back of the page (“duplex printing”).