Response to consultation on Technical Standards on standardised terminology and disclosure documents under the PAD
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The broad approach is an advantage for banks, which have many different services and very detailed fees, as these can be combined under some general categories. This very broad approach will, however, mean that it is difficult for consumers to comprehend what the broad categories actually include. This makes the overview confusing for consumers and does not live up to the requirement of transparency.
If one instead creates more narrow categories it means that FID contains only a selection of fees, which also reduces transparency for consumers.
The Danish Bankers Association believes that solution A will provide the most comprehensive overview for consumers. This would, however, require comprehensive guidelines on the different services and fees, so that both banks and consumers can understand which “category” different services belong to. In this way, banks would also have a better chance of completing FID in the same way so that there would be a real opportunity for comparison and transparency.
The Danish Bankers Association believes that comprehensive guidelines on the different services and fees should be drafted so that both banks and consumers can understand which “categories” different services belong to.
With regard to transparency of the price of payment accounts on the Danish market, where often only one price is fixed to the account, a range of fields for specific services should be stated with DKK 0.
There are already comprehensive terms and definitions in the field today, which is why it is regarded as inexpedient to introduce new ones. An example of this is “account maintenance”, which would usually be called “kontogebyr” and not “drift af konto” in Denmark. The term “kontogebyr” is known amongst banks and consumers and it is clear to both parties, which service it concerns.
The Danish Bankers Association finds that modern language with terms that are recognisable for both consumers and banks is preferable. Therefore, the option should be opened up so that individual countries’ authorities can accept that already established standardised expressions may be added in brackets.
Not enough space is allocated to the individual bank’s logo, which makes it difficult for banks to brand themselves.
The Danish Bankers Association finds that formal requirements go too far. It is inexpedient that rigid requirements for the size of paragraphs are imposed. The most important point should be that the main titles are created in such a way that documents can be compared.
In cases where a bank does not provide a certain service, this service should not be omitted from the list as this could confuse the customer. Transparency can only be ensured if documents are identical from bank to bank. If rules concerning fees are removed, the consumer could be in doubt whether the bank has “forgotten” the fee in question. Instead, the bank should note that the service is not provided. In situations where a service is free, the bank should state a price of DKK 0.
Member companies are in doubt about the understanding of “packages and service”. Does the expression only concern the account or does it also cover customer packages/programmes? This shows a complexity in the fee structure, especially with regard to customer programmes, which will make it difficult to carry out a comparison on the basis of the form.
The Danish Bankers Association doubts that the instructions for completing the form are sufficient. We expect that several problems will occur when individual banks begin filling out the form. The question is whether the national supervisory authorities will be able to help. It is very likely that different standards will arise in individual member states.
A clearer explanation of exactly what “comprehensive cost indicator” in-volves is missing.
The Danish Bankers Association finds it important that there is parallelism between FID and SoF. In SoF “interest paid” and “interest earned” appear, which are not included in SoF, this is a mistake.
SoF on page 37 is not identical with SoF on page 94. It is problematic that in SoF we use new words/terms i.e. “key cost indicator”, as this can lead to confusion for consumers, which will reduce transparency.
It can be problematic to show all interest changes, if it concerns a reference rate, which can be changed so often on a daily basis. A solution can be to show the gap in interest for the period in question and then show the overall interest amount that the customer received.
With regard to several account holders, banks wish to only fill out one form for the account in question, where it is also agreed with the customer that one account holder receives information on behalf of everyone.
Question 1: Do you agree with the EBA’s decision to take a broad approach to defining ‘service’? Please explain your reasoning.
There are advantages and disadvantages of taking a broad approach to the definition of “service”. Neither of the two methods precisely covers the individual products in banks.The broad approach is an advantage for banks, which have many different services and very detailed fees, as these can be combined under some general categories. This very broad approach will, however, mean that it is difficult for consumers to comprehend what the broad categories actually include. This makes the overview confusing for consumers and does not live up to the requirement of transparency.
If one instead creates more narrow categories it means that FID contains only a selection of fees, which also reduces transparency for consumers.
The Danish Bankers Association believes that solution A will provide the most comprehensive overview for consumers. This would, however, require comprehensive guidelines on the different services and fees, so that both banks and consumers can understand which “category” different services belong to. In this way, banks would also have a better chance of completing FID in the same way so that there would be a real opportunity for comparison and transparency.
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.
The definitions and terms give rise to doubt and confusion amongst banks, and will therefore, also create confusion for consumers. The definitions and terms are unclear and there is doubt about what the broad definitions and terms imply. The term “overdraft” causes the most confusion and concerns whether it is a question of an overdraft, which has been authorised by the bank or a granted credit facility. Inconsistent translations are also a cause for confusion.The Danish Bankers Association believes that comprehensive guidelines on the different services and fees should be drafted so that both banks and consumers can understand which “categories” different services belong to.
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.
The Danish Bankers Association finds that the standardised terms and definitions on a general level will promote transparency.With regard to transparency of the price of payment accounts on the Danish market, where often only one price is fixed to the account, a range of fields for specific services should be stated with DKK 0.
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.
Please refer to question 2. The Danish Bankers Association agrees that there is a difference between legal language and “everyday speech”. It is crucial that explanations that consumers understand are used. Only in this way transparency can be ensured.There are already comprehensive terms and definitions in the field today, which is why it is regarded as inexpedient to introduce new ones. An example of this is “account maintenance”, which would usually be called “kontogebyr” and not “drift af konto” in Denmark. The term “kontogebyr” is known amongst banks and consumers and it is clear to both parties, which service it concerns.
The Danish Bankers Association finds that modern language with terms that are recognisable for both consumers and banks is preferable. Therefore, the option should be opened up so that individual countries’ authorities can accept that already established standardised expressions may be added in brackets.
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.
It should be stated at the top of the document that we are dealing with a standardised EU document. In addition, space should be created so that the individual bank can refer to the fee overview of the bank.Not enough space is allocated to the individual bank’s logo, which makes it difficult for banks to brand themselves.
The Danish Bankers Association finds that formal requirements go too far. It is inexpedient that rigid requirements for the size of paragraphs are imposed. The most important point should be that the main titles are created in such a way that documents can be compared.
In cases where a bank does not provide a certain service, this service should not be omitted from the list as this could confuse the customer. Transparency can only be ensured if documents are identical from bank to bank. If rules concerning fees are removed, the consumer could be in doubt whether the bank has “forgotten” the fee in question. Instead, the bank should note that the service is not provided. In situations where a service is free, the bank should state a price of DKK 0.
Member companies are in doubt about the understanding of “packages and service”. Does the expression only concern the account or does it also cover customer packages/programmes? This shows a complexity in the fee structure, especially with regard to customer programmes, which will make it difficult to carry out a comparison on the basis of the form.
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.
It is possible that over time, the customer will understand that it is an EU standardised price list. But customers will still have difficulties understanding and seeing the expediency of the fact that there is both an EU list and a national list, which is much more detailed.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 can be difficult for banks to insert their logo in the space indicated.The Danish Bankers Association doubts that the instructions for completing the form are sufficient. We expect that several problems will occur when individual banks begin filling out the form. The question is whether the national supervisory authorities will be able to help. It is very likely that different standards will arise in individual member states.
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.
Please refer to question 7.A clearer explanation of exactly what “comprehensive cost indicator” in-volves is missing.
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 form is suited to fulfilling the aims of the Directive.The Danish Bankers Association finds it important that there is parallelism between FID and SoF. In SoF “interest paid” and “interest earned” appear, which are not included in SoF, this is a mistake.
SoF on page 37 is not identical with SoF on page 94. It is problematic that in SoF we use new words/terms i.e. “key cost indicator”, as this can lead to confusion for consumers, which will reduce transparency.
It can be problematic to show all interest changes, if it concerns a reference rate, which can be changed so often on a daily basis. A solution can be to show the gap in interest for the period in question and then show the overall interest amount that the customer received.
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.
As mentioned previously, it should be stated very clearly that it is a standardised EU document.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.
It is not possible to answer this at present. Only when banks begin filling out the form we will experience this and be able to see where the form causes issues.With regard to several account holders, banks wish to only fill out one form for the account in question, where it is also agreed with the customer that one account holder receives information on behalf of everyone.