Response to consultation on Technical Standards on standardised terminology and disclosure documents under the PAD
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- the Advisory Committee on the Financial Sector (CCSF) ;
- the French Banking Federation (FBF), the European Association of Co-operative Banks (EACB), the European Savings and Retail Banking Group (ESBG), the European Banking Federation (EBF) and the European Banking Industry Committee (EBIC) ;
as they have all shared our positions.
We acknowledge the difficulties that the EBA encountered in the identification of the most common services due to the general definition of ‘services’ provided in the PAD and to the different approaches taken by national authorities: some considering that a “service” is consisting of a number of sub-services, whereas other national authorities considered them to be separate services in their own right.
We recognise the benefits that the EBA asserts to the broad approach to defining “service” and in particular that this option would ensure that the Directive’s aim of increasing comparability would be achieved for a higher number of services.
We welcome the recognition by the EBA that the integration phase is an essential part of the standardisation process and that the approach followed to select the services to be standardised has a direct impact on the way in which Member States will subsequently integrate these terms into their national lists.
Even if the way national authorities choose to integrate the Union standardised terminology into their provisional lists is not part of the EBA mandate, it is particularly welcomed that the EBA has set out the different approaches and their respective pros and cons with the aim to ensure that all Member States understand the difficulties and benefits of various approaches.
Nevertheless, this selection is only part of the task and, as acknowledged by the EBA, the integration phase is an essential part of the standardisation process.
The EBA recognizes that the approach followed to select the services to be standardised has a direct impact on the way in which Member States will subsequently integrate these terms into their national lists and this integration might pose a challenge in reason of the broad approach option taken.
Thus it’s too early to say if this selection of services will achieve the Directive’s objectives of enhancing transparency and comparability as it highly depend on the approach that Member states will choose for the integration in the national list.
We particularly welcome the efforts made by the EBA to develop the terms and definitions in a way that addresses national specificities and to have allowed for terms and definitions to differ slightly between Member States that use the same language.
However, we have a number of concerns on some of the terms and definitions chosen as these do not reflect national approaches to using terms and definitions. Therefore we suggest some modifications in relation to the terms and definitions proposed by the EBA for France (please refer to our answer to Question 4).
1/ An initial series of modifications only aiming to clarify the terminology and definitions proposed without modifying their meaning. We must avoid defining a service by using the same terminology as is used for designating this service (e.g. defining “prélèvement” using “prélever”, etc.).
o CARTE DE DEBIT (DEBIT CARD) : L’établissement fournit une carte de paiement liée au compte du client. Le montant de chaque opération effectuée à l’aide de cette carte est débité directement et intégralement sur le compte du client.
Explanatory notes: The provision of the card is not necessarily linked to the opening of the account. Furthermore, strictly speaking this is not a question of deducting the transactions paid with the card but a straightforward debit from the customer’s account.
o VIREMENT: L’établissement qui tient le compte transfère, sur instruction du client, une somme d’argent du compte du client vers un autre compte.
Clarification and change of [French] wording to correspond to French practice.
o “ORDRE PERMANENT” should be changed to “VIREMENT PERMANENT”: L’établissement qui tient le compte effectue, sur instruction du client, des transferts réguliers, d’un montant fixe, du compte du client vers un autre compte.
Clarification and change of [French] wording to correspond to French practice.
2/ A second series of modifications intending to correct some errors or inaccuracies which could cause confusion or misunderstanding for customers.
o TENUE DE COMPTE (MAINTAINING THE ACCOUNT): L’établissement gère le compte du client.
Explanatory notes: the fees for maintaining the account do not cover the opening of the account; therefore, it is incorrect to specify account opening here.
Furthermore, the institution continues to manage the account even if the account is not used by the customer. Therefore, it is more appropriate to refer to “le compte du client.”
o CARTE DE CREDIT (CREDIT CARD) : L’établissement fournit une carte de paiement. Le montant total correspondant aux opérations effectuées à l’aide de cette carte au cours d’une période convenue est débité intégralement ou partiellement sur le compte du client ou sur la ligne de crédit ouverte au client à une date convenue. Lorsque le type de carte implique la conclusion d’un contrat de crédit entre l’établissement et le client, le contrat détermine si des intérêts seront facturés au client au titre du montant emprunté.
Explanatory notes: At the very least, this definition must remain consistent with the definitions used in the “Interchange” Regulation 2015/751 of 29 April 2015. In accordance with this Regulation, the definition of a credit card also includes cards associated with revolving credit and deferred debit cards. However, the latter cards would not be covered by the definition selected by the EBA. We must therefore extend this definition by not specifying the conclusion of a credit contract.
o “DECOUVERT” should be changed to “DECOUVERT AUTORISE”: L’établissement qui tient le compte et le client conviennent à l’avance que le compte peut être débiteur pendant une durée déterminée. Le contrat définit le montant maximum susceptible d’être utilisé et précise si des frais et des intérêts seront facturés au client.
Explanatory notes: The terminology proposed should be modified in favour of using “découvert autorisé”, which corresponds to French practice.
Furthermore, the definition currently proposed by the EBA is a source of confusion for the consumer as it could imply that the sum agreed between the institution and the customer would be credited to the account when in fact the account is debited.
o PRELEVEMENT (DIRECT DEBIT): Opération par laquelle un tiers (appelé bénéficiaire) fait prélever sur le compte du client, à la date ou aux dates convenues avec lui une somme d’argent dont le montant a préalablement été défini avec le client.
Lorsqu’il s’agit d’un prélèvement récurrent, le montant concerné peut varier à chaque échéance.
Préalablement, le client doit avoir autorisé le tiers (le bénéficiaire) à faire procéder à cette opération.
Explanatory notes: As described by the EBA this definition does not tally with the reality of a direct debit. There seems to have been an error in translation which we must correct: the recipient’s account is credited with the sum debited directly from the customer’s account rather than vice versa. It seems to us that this definition needs an in-depth review.
3/ Finally on the following, we have no demand for change neither on the term itself nor on the definition:
o RETRAIT D’ESPECES (CASH WITHDRAWALS): Le client retire des espèces à partir de son compte.
In our view the EBA has interpreted rather extensively the mandate it was given by the PAD. The EBA was tasked by the PAD to propose a “standardised presentation format” (article 4.6), but while the PAD refers to general criteria on format in relation to the FID (for example referring to characters of a readable size) the EBA, in the draft ITS, defines an unprecedented level of details setting the type of portrait format, the font type and font sizes, the location of the page number, and the line spacing, etc. (article 1 and several articles, for line spacing, of the draft ITS).
We feel that the industrial cost needed to meet these requirements is disproportionate in relation to the benefits for consumers stemming therefrom. The proposal also loses sight of the principle of proportionality.
In our view, that harmonization to such an extent does not serve the objective of readability but rather will increase complexity, as well as the volume, of the aggregate amount of documentation related to the provision of banking services that a consumer will be required to understand. It should be noted :
o In comparison, other pre-contractual documents like ESIS for mortgage credit (Directive 2014/17) or SECCI for consumer credit (Directive 2008/48) leave more freedom regarding their respective formats without simultaneously adversely affecting their comparability or readability thereof ;
o The draft ITS do not meet the requirements of recital 20 of the PAD, which states that “EBA should also take into account the fact that Member States may choose to provide the fee information document and the statement of fees together with information required pursuant to other Union or national legislative acts on payment accounts and related services”. In this regard, it should be emphasised that the FID and the SoF are not the sole documents given to the customer and the search for their clarity and comparability at the European level must not be achieved at the expense of the clarity and comparability of all documents submitted to the client. We believe that the more detailed and prescriptive the ITS are, the less the information provided under the PAD will be able to be fitted into other documentation to be provided.
As for the practical application of the adopted format, the results of the quantitative testing did not show clear benefits deriving therefrom:
o Only 68% of all consumers said that “the format used in each document in terms of font style, font size, (…) contributes to the documents being easy to understand”. This means that the remaining 32% of consumers did not see any clear benefit based on the proposed format ;
o For more than one in four consumers (26%) the format contributes to the documents being difficult to understand.
- Suggestion: We would therefore suggest EBA to give more flexibility regarding the format of the FID.
We believe that instead of applying a legalistic approach to the matter the end result (a document, which is easy to understand and is thereby to the benefit of the customer) should be at the forefront.
The ITS should provide a sufficiently flexible format, including in terms of font, column size, line spacing, etc., in order to remain readable despite the richness of certain contents and irrespective of the medium, in particular electronic, as French clients mostly use their mobile, tablet or computer to carry out their banking operations.
Therefore the provision of a document on an A4 format appears neither to be adapted to the diversity of the media available today nor necessary to guarantee the full information of the consumer.
2/ Comments regarding packages of services
We have a practical remark linked to the additional information that PSP’s will have to provide where one or more services are offered as part of a package.
Regarding packages of banking services, the commercial approach to this differs greatly from country to country. While in some countries PSP’s do not provide packages, in others only basic packages are offered, when in other countries, like in France, numerous packages, and often tailor made ones, are provided to meet the needs of highly diverse profiles of customers.
The French market for packaged services has been monitored since 2011 each year in a specific chapter of the annual report of the Observatory of Banking Fees of the Advisory Committee on the Financial Sector (CCSF). The following points emerge:
o French banks offer on average 5.5 packages of services (with a maximum of 14 for the same institution), 3.5 of which correspond to competing commercial offers and 2 of which have a uniform content and a target clientele defined by law ;
Groupe BPCE through its two major cooperative banking networks offers nationally 3 packages of services in the Banque Populaire banks and 5 packages of services in the Caisses d’Epargne. It is important to note that for both networks 2 packages of services are the regulatory ones and in some of the 15 Banque Populaire banks and the 17 Caisses d’Epargne it also exist regional packages of services ;
o In addition, 81% of banks, representing almost the entire market, offer one or more packages of services that are customisable or semi-customisable. The degree of customisation varies greatly from one bank to another, with the base containing an average of 7.50 services, with potentially up to 18 options. Both cooperative banking networks of Groupe BPCE propose a national customisable package of services with a base containing 10 services, on average, on which it is possible to add up to 16 options in the Caisses d’Epargne and with a base containing 2 services, on average, on which it is possible to add up to 18 options in the Banque Populaire banks.
While the PAD does not include any requirements regarding the presentation of several packages of services offered by a single PSP (art. 4.3), the EBA, in its draft ITS, clearly establish that “the information shall be provided for each package in a separate table” (article 7.5).
This requirement, combined with the huge constraint on the proposed format of the FID, will lead to significantly increase the FID length (multiplication of the number of pages) which is in contradiction with the expected final outcome of the PAD, namely a short and succinct document. As a result, this also conflicts with the objective of readability as well as with the objective of comparability of the FID that the EBA was expected to follow.
As an illustration of the practical difficulties PSPs will encounter to provide information on all packages of services:
- It will be impossible to present, on a pre-contractual document, the content of the customisable packages of services because this content will be chosen by the customer at the time of signing the contract. The presentation of all possible combinations of the content would be difficult to achieve and, beyond considerably lengthening the document, would run counter to the objective of readability ;
- Several elements will contribute to lengthen the FID :
o The sizes defined for the columns in the “table on Package of services” are not ideally suited to the information to provide : if the imposed size of the “Package of services” column (6 cm wide) seems too small to give all the details on the services, on the contrary the fee column (9 cm wide) appears a little wide for only two pieces of information (the frequency the package is charged and the total annual cost of the package) ;
o The fee of a package could be different according to the type of the payment card chosen by the customer and according to the age of the customer. This will oblige for each package to display at least a fee line for each age group and for each payment card proposed and even, for strict application, to display again all the content of the package according with each combination (age and payment card) ;
o According to the ITS, the fee column in the table on package of services should only display the frequency the package is charged and the total annual cost of the package. This means that we would have to repeat the detail of the package according with each change even minimal. Some situations, for example, when a specific discount for the second payment card of a joint account is offered, could lead to the obligation to display again all the content of the package with the fee for each card as it will not be possible to add a line explaining the logic of the calculation.
In France banks and consumer associations agree to recognize the interest of a brief document allowing real comparisons and easy understanding. They also agree to consider that a document of more than 2 pages would not allow reaching the two objectives of a brief and clear document.
Given the plethora of different options at the consumer’s disposal, notably with tailor made packages, comparability between packages is extremely hard at national level, whereas at the European level it is near impossible.
It would be, therefore, more appropriate (as well as in the interest of keeping the relevant documentation short, succinct and hence readable) to provide the consumer with a single example of the package “most commonly used”. This way, in accordance with recital paragraph 24 of the PAD, a consumer is given the opportunity to compare the global fee charged for a (typical) package of services with the sum of fees charged for the same services if performed separately. Based on this, the consumer can then decide if packages would be interesting to him prima faciae.
Moreover, the approach undertaken by the EBA would be very likely to prompt PSPs to renounce to the possibility of customisation of packages which nevertheless correspond to a real need expressed by our customers and respond to one of the concerns expressed in the recitals 24 of the PAD on non-customizable packages “…/…payment service providers may offer payment accounts packaged with products not requested by consumers which are not essential for payment accounts…/…”
- Suggestion: Therefore, if we want to meet the goal to have a short document and also to respect the PAD requirement of readability, we would suggest the option that a PSP could only disclose, in the FID, additional information on a single example of the package “most commonly used” by its consumers. This will, at the same time, be aligned with the spirit of the PAD to select “the most commonly used services” (art.3.2a) and with its goal to deliver a short document.
3/ Additional suggestion :
The date of publication of the document should be inserted. Prices are regularly adjusted. It is thus necessary to ensure that the FID is up to date and that the consumer receives the correct data along with a temporal frame of reference.
1/ Observations
o Although it is true that 50% of all consumers tested agreed that the symbol makes the document distinguishable from other documentation, it is also worth noting that the remaining half of the respondents disagreed or did not know whether or not they perceived this to be true. This result showing only a limited potential benefit for consumers has to be weighed against the potential important industrial cost required in order to meet the requirements of the ITS.
o In branches it is not always possible to print in colour. However, it is common practice to feed printers with a letterhead, which already includes the bank logo in colour.
2/ Suggestions :
o We would suggest softening the requirement set out in point 2 of Article 3 of the relevant ITS: taking into account the wide diversity of printing equipment available, all colour / black & white combinations between the logo of the PSP and the common symbol should be allowed. We believe that the document’s distinctiveness and readability will be ensured even if the document is printed with a common symbol displayed in black and white, should the logo of the PSP be printed in colour.
o The obligation to respect the same format (a square no larger than 2.5 cm x 2.5 cm) for the symbol and for the logo of the PSP is a too strong constraint. If a precise printing surface can be considered for the common symbol, the visual identity of certain PSPs, defined in their graphic charter, would hardly fit into a square of this size. We would therefore like to suggest that these requirements be adjusted to become less restrictive.
- Article 3: We would suggest softening the requirement set out in point 2 of Article 3 of the ITS: Taking into account the wide diversity of printing equipment available, all colour / black & white combinations between the logo of the PSP and the common symbol should be allowed. Moreover, we feel the rules regarding the size of the logo of the payment service provider contained in the draft ITS, are too limiting. Please refer to our answer to Question 6 for details on this.
- Article 6: The ‘Introductory statement’ goes beyond PAD which does not require the PSP to inform the consumer in the FID that a glossary is available free of charge. With respect of which information should be included in the FID, the ITS regarding this matter should be limited to the requirements laid down in point 2 of Article 4 of the PAD.
- Article 7: “Table on Package of services” covers cases where one or more services are offered as part of a package linked to a payment account: if we want to meet the goal to have a short document and also to respect the PAD requirement of readability, we would suggest the option that a PSP could only disclose, in the FID, additional information on a single example of the package “most commonly used” by its consumers. This will, at the same time, be aligned with the spirit of the PAD to select “the most commonly used services” (art.3.2a) as well as with its goal to deliver a short document. Please refer to our answer to Question 5 for details on this.
2/ The date of publication of the document should be inserted. Prices are regularly adjusted. It is thus necessary to ensure that the FID is up to date and that the consumer receives the correct data along with a temporal frame of reference.
We have comments on several articles :
- Article 3: Please refer to our answer to Question 6.
- Article 6: Please refer to our answer to Question 7.
- Article 7: Please refer to our answer to Question 5.
On the format, we would like to firstly reiterate the position we expressed above (regarding the FID). Namely, we feel that when preparing the SoF template, the EBA has overstepped the limits of its mandate. Please refer to our answer to Question 5.
EBA was tasked by the PAD to propose a “standardised presentation format” (article 5.4), but while the PAD refers to general criteria on format in relation to the SoF (referring for example to characters of a readable size) the EBA, in the draft ITS, has defined an unprecedented level of details setting the type of portrait format, the font type and font sizes, the location of the page number, and the line spacing, etc. (article 1).
- Suggestion :
Once again we would like to propose that more leeway is afforded with respect to the format of the SoF for the reasons described in our answer to Question 5.
Furthermore, we would like to reiterate our concerns on digital versions of the SoF not having been foreseen, thereby not properly taking into account the process of digitisation.
Therefore the provision of a document on an A4 format appears neither to be adapted to the diversity of the media available today nor necessary to guarantee the full information of the consumer.
It is useful to note here that, in the PAD, a great freedom has been left in the choice of the communication channel used to provide the statement of fees as it is stated in article 5 “The communication channel used to provide the statement of fees shall be agreed with the consumer”.
2/ Comments regarding packages of services
Pursuant to Article 11(1)(a) of the ITS, PSPs are required to list the content of the package(s) while this is not a requirement contained in the provisions of the PAD.
The underlying objective, at this stage, is to allow the consumer to estimate the cost of his consumption of the banking services that he has already chosen and subscribed to and not to give him commercial information on the content of the offers. This information was provided to him prior to this in the FID as well as in the relevant contractual documents : the FID pre-contractual document allows him to compare offers before subscribing and the contractual documents to know exactly the content of what he has chosen to subscribe.
Therefore, in the interest of the consumer, it is better that each documentation (pre-contractual, contractual, and post-contractual) firmly sticks to its main objective in terms of customer information.
- Suggestion :
We would therefore suggest that the EBA does not keep the above mentioned requirement, as it may have a negative impact on the readability of the SoF, owing to the increase of its volume as a consequence of this requirement. In France consumer associations considers it essential that the SoF is a short document not exceeding 2 pages.
2/ Comments regarding the distinction between services used and services charged
The draft ITS require for the statement of fees included in the package of services subscribed by the consumer (art 11) and for the statement of fees of each service linked to the payment account (art 12) to display the number of time that these different fees have been charged. This may prove to be completely inoperative in certain cases: for example in the case of flat-rate fees or capped fees. Moreover, this is not compliant with the point 2(a) of Article 5 of the PAD which states that the consumer must be informed on “the number of times the service was used” during the period and not the number of time the service was charged.
- Suggestion :
Considering that it is possible that a service is used but not charged or fully charged we would suggest retaining the reference of a service used, which is more relevant for the consumer as well as consistent with the PAD.
Given the fact that reductions/ discounts will be difficult to present in the SoF (except at the bottom of the document under the heading Additional information") we would also suggest that for purposes of clarity and better visibility they be allowed to be displayed, at the choice of the PSP, either in an additional column or as an additional fee line in credit complementing any statement of a fee charged.
3/ Additional suggestion
Possibility to delete irrelevant tables: We would suggest that the possibility to delete the table “Detail of interest paid on the account” (article 13 of the ITS) and the table “Detail of interest earned on the account” (article 14 of the ITS) be given when no interest is paid or earned by the consumer (in line with point 4 of article 11 and point 10 of Article 12 of the same ITS).
Such a possibility, suggested by point 1 of article 5 of the PAD (“…/…as well as, where applicable, information regarding the interest rates…/…”) would allow to substantially lightening the SoF. For example, virtually all PSPs in France do not serve credit interest on payment accounts. Introducing this empty heading would confuse the consumer."
1/ Observations:
o Although it is true that 52% of all consumers tested agreed that the proposed symbol makes the document distinguishable from other documentation, it is also worth noting that the remaining half of the respondents disagreed or did not know whether or not they perceived this to be true. This result reflecting a measured and clearly limited potential benefit to consumers has to be weighed against the potential important industrial cost required in order to meet the requirements of the ITS.
o Currently, the annual statement of fees that the French banks have been required to produce by law since 2009 is mainly printed in black and white by huge national document processing platforms using bulky rolls of paper with the graphics standards of the bank (logo and legal notices) printed beforehand and in colour. Printing only the common symbol in colour while the rest of the document would be printed in black and white would impose costly change in impression lines.
o In branches it is not always possible to print in colour, but it is a common practice to feed printers with a letterhead, which already includes the bank logo in colour.
2/ Suggestions:
o We would suggest softening the requirement set out in Art. 3(2) of the relevant ITS: All colour / black & white combinations between the logo of the PSP and the common symbol should be allowed to take into account the wide diversity of printing equipment available in branches and the industrial printing processes already in place. We believe that the document’s distinctiveness and readability will be ensured even if the document is printed with a common symbol displayed in black and white, should the logo of the PSP be printed in colour.
o The obligation to respect the same format (a square no larger than 2.5 cm x 2.5 cm) for the symbol and for the logo of the PSP is a too strong constraint. If a precise printing surface can be considered for the common symbol, the visual identity of certain PSPs, defined in their graphic charter, would hardly fit into a square of this size. We would therefore like to suggest that these requirements be adjusted to become less restrictive.
- Article 3: We would suggest softening the requirement set out in point 2 of this article. All colour / black & white combinations between the logo of the PSP and the common symbol should be allowed to take into account the wide diversity of printing equipment available in branches and the industrial printing processes already in place. Moreover, the softening of the requirement regarding the size of the logo of the PSP contained in the first paragraph should also be considered. Please refer to our answer to Question 10 for more details on this.
- Article 11: We would suggest that the EBA does away with the requirement to provide information on the content of the packages based on the fact that such a requirement is not contained in the provisions of the PAD. We would also suggest retaining the reference of a service used, more relevant for the consumer, and consistent with the PAD. We would also suggest that for purposes of clarity and better visibility they be allowed to be displayed, at the choice of the PSP, either in an additional column or as an additional fee line in credit complementing any statement of a fee charged.
Please refer to our answer to Question 9 for more details on this.
- Article 12: We would suggest retaining the reference of a service used, more relevant for the consumer, and consistent with the PAD. Given the fact that reductions/ discounts will be difficult to present in the SoF (except at the bottom of the document under the heading Additional information") we would also suggest that for purposes of clarity and better visibility they be allowed to be displayed, at the choice of the PSP, either in an additional column or as an additional fee line in credit complementing any statement of a fee charged. Please refer to our answer to Question 9 for more details on this.
- Article 13: We would suggest that the possibility to delete the table “Detail of interest paid on the account” be given when no interest is paid to the consumer. Please refer to our answer to Question 9 for more details on this.
- Article 14: We would suggest that the possibility to delete the table “Detail of interest earned on the account” be given when no interest is earned by the consumer. We would also suggest to delete the point 5 which appears redundant with point 7. Please refer to our answer to Question 9 for more details on this."
- Article 11: Please refer to our answer to Question 9
- Article 12: Please refer to our answer to Question 9
- Article 13 : Please refer to our answer to Question 9
- Article 14: Please refer to our answer to Question 9 and 11
Question 1: Do you agree with the EBA’s decision to take a broad approach to defining ‘service’? Please explain your reasoning.
As a preliminary point, we would like to stress that we support the responses to this consultation made by :- the Advisory Committee on the Financial Sector (CCSF) ;
- the French Banking Federation (FBF), the European Association of Co-operative Banks (EACB), the European Savings and Retail Banking Group (ESBG), the European Banking Federation (EBF) and the European Banking Industry Committee (EBIC) ;
as they have all shared our positions.
We acknowledge the difficulties that the EBA encountered in the identification of the most common services due to the general definition of ‘services’ provided in the PAD and to the different approaches taken by national authorities: some considering that a “service” is consisting of a number of sub-services, whereas other national authorities considered them to be separate services in their own right.
We recognise the benefits that the EBA asserts to the broad approach to defining “service” and in particular that this option would ensure that the Directive’s aim of increasing comparability would be achieved for a higher number of services.
We welcome the recognition by the EBA that the integration phase is an essential part of the standardisation process and that the approach followed to select the services to be standardised has a direct impact on the way in which Member States will subsequently integrate these terms into their national lists.
Even if the way national authorities choose to integrate the Union standardised terminology into their provisional lists is not part of the EBA mandate, it is particularly welcomed that the EBA has set out the different approaches and their respective pros and cons with the aim to ensure that all Member States understand the difficulties and benefits of various approaches.
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 do not question the criteria chosen by the European Banking Authority for the selection of services (frequency of services included by national authorities and taking the broad approach to assess the “service”).Nevertheless, this selection is only part of the task and, as acknowledged by the EBA, the integration phase is an essential part of the standardisation process.
The EBA recognizes that the approach followed to select the services to be standardised has a direct impact on the way in which Member States will subsequently integrate these terms into their national lists and this integration might pose a challenge in reason of the broad approach option taken.
Thus it’s too early to say if this selection of services will achieve the Directive’s objectives of enhancing transparency and comparability as it highly depend on the approach that Member states will choose for the integration in the national list.
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 consider that the drafting decisions taken by the EBA for the standardised terms and definitions, which should be accessible to consumers and, as far as possible, drafted in a clear and simple way so as to help them easily compare services at EU level, are suitable for achieving the aims of the Directive.We particularly welcome the efforts made by the EBA to develop the terms and definitions in a way that addresses national specificities and to have allowed for terms and definitions to differ slightly between Member States that use the same language.
However, we have a number of concerns on some of the terms and definitions chosen as these do not reflect national approaches to using terms and definitions. Therefore we suggest some modifications in relation to the terms and definitions proposed by the EBA for France (please refer to our answer to Question 4).
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 have a number of concerns on some of the terms and definitions chosen as these do not reflect national approaches to using terms and definitions. Therefore we suggest some modifications in relation to the terms and definitions proposed by the EBA for France :1/ An initial series of modifications only aiming to clarify the terminology and definitions proposed without modifying their meaning. We must avoid defining a service by using the same terminology as is used for designating this service (e.g. defining “prélèvement” using “prélever”, etc.).
o CARTE DE DEBIT (DEBIT CARD) : L’établissement fournit une carte de paiement liée au compte du client. Le montant de chaque opération effectuée à l’aide de cette carte est débité directement et intégralement sur le compte du client.
Explanatory notes: The provision of the card is not necessarily linked to the opening of the account. Furthermore, strictly speaking this is not a question of deducting the transactions paid with the card but a straightforward debit from the customer’s account.
o VIREMENT: L’établissement qui tient le compte transfère, sur instruction du client, une somme d’argent du compte du client vers un autre compte.
Clarification and change of [French] wording to correspond to French practice.
o “ORDRE PERMANENT” should be changed to “VIREMENT PERMANENT”: L’établissement qui tient le compte effectue, sur instruction du client, des transferts réguliers, d’un montant fixe, du compte du client vers un autre compte.
Clarification and change of [French] wording to correspond to French practice.
2/ A second series of modifications intending to correct some errors or inaccuracies which could cause confusion or misunderstanding for customers.
o TENUE DE COMPTE (MAINTAINING THE ACCOUNT): L’établissement gère le compte du client.
Explanatory notes: the fees for maintaining the account do not cover the opening of the account; therefore, it is incorrect to specify account opening here.
Furthermore, the institution continues to manage the account even if the account is not used by the customer. Therefore, it is more appropriate to refer to “le compte du client.”
o CARTE DE CREDIT (CREDIT CARD) : L’établissement fournit une carte de paiement. Le montant total correspondant aux opérations effectuées à l’aide de cette carte au cours d’une période convenue est débité intégralement ou partiellement sur le compte du client ou sur la ligne de crédit ouverte au client à une date convenue. Lorsque le type de carte implique la conclusion d’un contrat de crédit entre l’établissement et le client, le contrat détermine si des intérêts seront facturés au client au titre du montant emprunté.
Explanatory notes: At the very least, this definition must remain consistent with the definitions used in the “Interchange” Regulation 2015/751 of 29 April 2015. In accordance with this Regulation, the definition of a credit card also includes cards associated with revolving credit and deferred debit cards. However, the latter cards would not be covered by the definition selected by the EBA. We must therefore extend this definition by not specifying the conclusion of a credit contract.
o “DECOUVERT” should be changed to “DECOUVERT AUTORISE”: L’établissement qui tient le compte et le client conviennent à l’avance que le compte peut être débiteur pendant une durée déterminée. Le contrat définit le montant maximum susceptible d’être utilisé et précise si des frais et des intérêts seront facturés au client.
Explanatory notes: The terminology proposed should be modified in favour of using “découvert autorisé”, which corresponds to French practice.
Furthermore, the definition currently proposed by the EBA is a source of confusion for the consumer as it could imply that the sum agreed between the institution and the customer would be credited to the account when in fact the account is debited.
o PRELEVEMENT (DIRECT DEBIT): Opération par laquelle un tiers (appelé bénéficiaire) fait prélever sur le compte du client, à la date ou aux dates convenues avec lui une somme d’argent dont le montant a préalablement été défini avec le client.
Lorsqu’il s’agit d’un prélèvement récurrent, le montant concerné peut varier à chaque échéance.
Préalablement, le client doit avoir autorisé le tiers (le bénéficiaire) à faire procéder à cette opération.
Explanatory notes: As described by the EBA this definition does not tally with the reality of a direct debit. There seems to have been an error in translation which we must correct: the recipient’s account is credited with the sum debited directly from the customer’s account rather than vice versa. It seems to us that this definition needs an in-depth review.
3/ Finally on the following, we have no demand for change neither on the term itself nor on the definition:
o RETRAIT D’ESPECES (CASH WITHDRAWALS): Le client retire des espèces à partir de son compte.
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.
1/ Comments regarding the format of the FIDIn our view the EBA has interpreted rather extensively the mandate it was given by the PAD. The EBA was tasked by the PAD to propose a “standardised presentation format” (article 4.6), but while the PAD refers to general criteria on format in relation to the FID (for example referring to characters of a readable size) the EBA, in the draft ITS, defines an unprecedented level of details setting the type of portrait format, the font type and font sizes, the location of the page number, and the line spacing, etc. (article 1 and several articles, for line spacing, of the draft ITS).
We feel that the industrial cost needed to meet these requirements is disproportionate in relation to the benefits for consumers stemming therefrom. The proposal also loses sight of the principle of proportionality.
In our view, that harmonization to such an extent does not serve the objective of readability but rather will increase complexity, as well as the volume, of the aggregate amount of documentation related to the provision of banking services that a consumer will be required to understand. It should be noted :
o In comparison, other pre-contractual documents like ESIS for mortgage credit (Directive 2014/17) or SECCI for consumer credit (Directive 2008/48) leave more freedom regarding their respective formats without simultaneously adversely affecting their comparability or readability thereof ;
o The draft ITS do not meet the requirements of recital 20 of the PAD, which states that “EBA should also take into account the fact that Member States may choose to provide the fee information document and the statement of fees together with information required pursuant to other Union or national legislative acts on payment accounts and related services”. In this regard, it should be emphasised that the FID and the SoF are not the sole documents given to the customer and the search for their clarity and comparability at the European level must not be achieved at the expense of the clarity and comparability of all documents submitted to the client. We believe that the more detailed and prescriptive the ITS are, the less the information provided under the PAD will be able to be fitted into other documentation to be provided.
As for the practical application of the adopted format, the results of the quantitative testing did not show clear benefits deriving therefrom:
o Only 68% of all consumers said that “the format used in each document in terms of font style, font size, (…) contributes to the documents being easy to understand”. This means that the remaining 32% of consumers did not see any clear benefit based on the proposed format ;
o For more than one in four consumers (26%) the format contributes to the documents being difficult to understand.
- Suggestion: We would therefore suggest EBA to give more flexibility regarding the format of the FID.
We believe that instead of applying a legalistic approach to the matter the end result (a document, which is easy to understand and is thereby to the benefit of the customer) should be at the forefront.
The ITS should provide a sufficiently flexible format, including in terms of font, column size, line spacing, etc., in order to remain readable despite the richness of certain contents and irrespective of the medium, in particular electronic, as French clients mostly use their mobile, tablet or computer to carry out their banking operations.
Therefore the provision of a document on an A4 format appears neither to be adapted to the diversity of the media available today nor necessary to guarantee the full information of the consumer.
2/ Comments regarding packages of services
We have a practical remark linked to the additional information that PSP’s will have to provide where one or more services are offered as part of a package.
Regarding packages of banking services, the commercial approach to this differs greatly from country to country. While in some countries PSP’s do not provide packages, in others only basic packages are offered, when in other countries, like in France, numerous packages, and often tailor made ones, are provided to meet the needs of highly diverse profiles of customers.
The French market for packaged services has been monitored since 2011 each year in a specific chapter of the annual report of the Observatory of Banking Fees of the Advisory Committee on the Financial Sector (CCSF). The following points emerge:
o French banks offer on average 5.5 packages of services (with a maximum of 14 for the same institution), 3.5 of which correspond to competing commercial offers and 2 of which have a uniform content and a target clientele defined by law ;
Groupe BPCE through its two major cooperative banking networks offers nationally 3 packages of services in the Banque Populaire banks and 5 packages of services in the Caisses d’Epargne. It is important to note that for both networks 2 packages of services are the regulatory ones and in some of the 15 Banque Populaire banks and the 17 Caisses d’Epargne it also exist regional packages of services ;
o In addition, 81% of banks, representing almost the entire market, offer one or more packages of services that are customisable or semi-customisable. The degree of customisation varies greatly from one bank to another, with the base containing an average of 7.50 services, with potentially up to 18 options. Both cooperative banking networks of Groupe BPCE propose a national customisable package of services with a base containing 10 services, on average, on which it is possible to add up to 16 options in the Caisses d’Epargne and with a base containing 2 services, on average, on which it is possible to add up to 18 options in the Banque Populaire banks.
While the PAD does not include any requirements regarding the presentation of several packages of services offered by a single PSP (art. 4.3), the EBA, in its draft ITS, clearly establish that “the information shall be provided for each package in a separate table” (article 7.5).
This requirement, combined with the huge constraint on the proposed format of the FID, will lead to significantly increase the FID length (multiplication of the number of pages) which is in contradiction with the expected final outcome of the PAD, namely a short and succinct document. As a result, this also conflicts with the objective of readability as well as with the objective of comparability of the FID that the EBA was expected to follow.
As an illustration of the practical difficulties PSPs will encounter to provide information on all packages of services:
- It will be impossible to present, on a pre-contractual document, the content of the customisable packages of services because this content will be chosen by the customer at the time of signing the contract. The presentation of all possible combinations of the content would be difficult to achieve and, beyond considerably lengthening the document, would run counter to the objective of readability ;
- Several elements will contribute to lengthen the FID :
o The sizes defined for the columns in the “table on Package of services” are not ideally suited to the information to provide : if the imposed size of the “Package of services” column (6 cm wide) seems too small to give all the details on the services, on the contrary the fee column (9 cm wide) appears a little wide for only two pieces of information (the frequency the package is charged and the total annual cost of the package) ;
o The fee of a package could be different according to the type of the payment card chosen by the customer and according to the age of the customer. This will oblige for each package to display at least a fee line for each age group and for each payment card proposed and even, for strict application, to display again all the content of the package according with each combination (age and payment card) ;
o According to the ITS, the fee column in the table on package of services should only display the frequency the package is charged and the total annual cost of the package. This means that we would have to repeat the detail of the package according with each change even minimal. Some situations, for example, when a specific discount for the second payment card of a joint account is offered, could lead to the obligation to display again all the content of the package with the fee for each card as it will not be possible to add a line explaining the logic of the calculation.
In France banks and consumer associations agree to recognize the interest of a brief document allowing real comparisons and easy understanding. They also agree to consider that a document of more than 2 pages would not allow reaching the two objectives of a brief and clear document.
Given the plethora of different options at the consumer’s disposal, notably with tailor made packages, comparability between packages is extremely hard at national level, whereas at the European level it is near impossible.
It would be, therefore, more appropriate (as well as in the interest of keeping the relevant documentation short, succinct and hence readable) to provide the consumer with a single example of the package “most commonly used”. This way, in accordance with recital paragraph 24 of the PAD, a consumer is given the opportunity to compare the global fee charged for a (typical) package of services with the sum of fees charged for the same services if performed separately. Based on this, the consumer can then decide if packages would be interesting to him prima faciae.
Moreover, the approach undertaken by the EBA would be very likely to prompt PSPs to renounce to the possibility of customisation of packages which nevertheless correspond to a real need expressed by our customers and respond to one of the concerns expressed in the recitals 24 of the PAD on non-customizable packages “…/…payment service providers may offer payment accounts packaged with products not requested by consumers which are not essential for payment accounts…/…”
- Suggestion: Therefore, if we want to meet the goal to have a short document and also to respect the PAD requirement of readability, we would suggest the option that a PSP could only disclose, in the FID, additional information on a single example of the package “most commonly used” by its consumers. This will, at the same time, be aligned with the spirit of the PAD to select “the most commonly used services” (art.3.2a) and with its goal to deliver a short document.
3/ Additional suggestion :
The date of publication of the document should be inserted. Prices are regularly adjusted. It is thus necessary to ensure that the FID is up to date and that the consumer receives the correct data along with a temporal frame of reference.
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.
With regard to the common symbol in the FID template, we would like to make some observations and a suggestion:1/ Observations
o Although it is true that 50% of all consumers tested agreed that the symbol makes the document distinguishable from other documentation, it is also worth noting that the remaining half of the respondents disagreed or did not know whether or not they perceived this to be true. This result showing only a limited potential benefit for consumers has to be weighed against the potential important industrial cost required in order to meet the requirements of the ITS.
o In branches it is not always possible to print in colour. However, it is common practice to feed printers with a letterhead, which already includes the bank logo in colour.
2/ Suggestions :
o We would suggest softening the requirement set out in point 2 of Article 3 of the relevant ITS: taking into account the wide diversity of printing equipment available, all colour / black & white combinations between the logo of the PSP and the common symbol should be allowed. We believe that the document’s distinctiveness and readability will be ensured even if the document is printed with a common symbol displayed in black and white, should the logo of the PSP be printed in colour.
o The obligation to respect the same format (a square no larger than 2.5 cm x 2.5 cm) for the symbol and for the logo of the PSP is a too strong constraint. If a precise printing surface can be considered for the common symbol, the visual identity of certain PSPs, defined in their graphic charter, would hardly fit into a square of this size. We would therefore like to suggest that these requirements be adjusted to become less restrictive.
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.
1/ We have comments on several articles :- Article 3: We would suggest softening the requirement set out in point 2 of Article 3 of the ITS: Taking into account the wide diversity of printing equipment available, all colour / black & white combinations between the logo of the PSP and the common symbol should be allowed. Moreover, we feel the rules regarding the size of the logo of the payment service provider contained in the draft ITS, are too limiting. Please refer to our answer to Question 6 for details on this.
- Article 6: The ‘Introductory statement’ goes beyond PAD which does not require the PSP to inform the consumer in the FID that a glossary is available free of charge. With respect of which information should be included in the FID, the ITS regarding this matter should be limited to the requirements laid down in point 2 of Article 4 of the PAD.
- Article 7: “Table on Package of services” covers cases where one or more services are offered as part of a package linked to a payment account: if we want to meet the goal to have a short document and also to respect the PAD requirement of readability, we would suggest the option that a PSP could only disclose, in the FID, additional information on a single example of the package “most commonly used” by its consumers. This will, at the same time, be aligned with the spirit of the PAD to select “the most commonly used services” (art.3.2a) as well as with its goal to deliver a short document. Please refer to our answer to Question 5 for details on this.
2/ The date of publication of the document should be inserted. Prices are regularly adjusted. It is thus necessary to ensure that the FID is up to date and that the consumer receives the correct data along with a temporal frame of reference.
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.
We welcome the recital 4 of the ITS which states that the FID should be easily produced by PSPs, and that there should be clear instructions as to how to fill it out.We have comments on several articles :
- Article 3: Please refer to our answer to Question 6.
- Article 6: Please refer to our answer to Question 7.
- Article 7: Please refer to our answer to Question 5.
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.
1/ Comments regarding the format of the SoFOn the format, we would like to firstly reiterate the position we expressed above (regarding the FID). Namely, we feel that when preparing the SoF template, the EBA has overstepped the limits of its mandate. Please refer to our answer to Question 5.
EBA was tasked by the PAD to propose a “standardised presentation format” (article 5.4), but while the PAD refers to general criteria on format in relation to the SoF (referring for example to characters of a readable size) the EBA, in the draft ITS, has defined an unprecedented level of details setting the type of portrait format, the font type and font sizes, the location of the page number, and the line spacing, etc. (article 1).
- Suggestion :
Once again we would like to propose that more leeway is afforded with respect to the format of the SoF for the reasons described in our answer to Question 5.
Furthermore, we would like to reiterate our concerns on digital versions of the SoF not having been foreseen, thereby not properly taking into account the process of digitisation.
Therefore the provision of a document on an A4 format appears neither to be adapted to the diversity of the media available today nor necessary to guarantee the full information of the consumer.
It is useful to note here that, in the PAD, a great freedom has been left in the choice of the communication channel used to provide the statement of fees as it is stated in article 5 “The communication channel used to provide the statement of fees shall be agreed with the consumer”.
2/ Comments regarding packages of services
Pursuant to Article 11(1)(a) of the ITS, PSPs are required to list the content of the package(s) while this is not a requirement contained in the provisions of the PAD.
The underlying objective, at this stage, is to allow the consumer to estimate the cost of his consumption of the banking services that he has already chosen and subscribed to and not to give him commercial information on the content of the offers. This information was provided to him prior to this in the FID as well as in the relevant contractual documents : the FID pre-contractual document allows him to compare offers before subscribing and the contractual documents to know exactly the content of what he has chosen to subscribe.
Therefore, in the interest of the consumer, it is better that each documentation (pre-contractual, contractual, and post-contractual) firmly sticks to its main objective in terms of customer information.
- Suggestion :
We would therefore suggest that the EBA does not keep the above mentioned requirement, as it may have a negative impact on the readability of the SoF, owing to the increase of its volume as a consequence of this requirement. In France consumer associations considers it essential that the SoF is a short document not exceeding 2 pages.
2/ Comments regarding the distinction between services used and services charged
The draft ITS require for the statement of fees included in the package of services subscribed by the consumer (art 11) and for the statement of fees of each service linked to the payment account (art 12) to display the number of time that these different fees have been charged. This may prove to be completely inoperative in certain cases: for example in the case of flat-rate fees or capped fees. Moreover, this is not compliant with the point 2(a) of Article 5 of the PAD which states that the consumer must be informed on “the number of times the service was used” during the period and not the number of time the service was charged.
- Suggestion :
Considering that it is possible that a service is used but not charged or fully charged we would suggest retaining the reference of a service used, which is more relevant for the consumer as well as consistent with the PAD.
Given the fact that reductions/ discounts will be difficult to present in the SoF (except at the bottom of the document under the heading Additional information") we would also suggest that for purposes of clarity and better visibility they be allowed to be displayed, at the choice of the PSP, either in an additional column or as an additional fee line in credit complementing any statement of a fee charged.
3/ Additional suggestion
Possibility to delete irrelevant tables: We would suggest that the possibility to delete the table “Detail of interest paid on the account” (article 13 of the ITS) and the table “Detail of interest earned on the account” (article 14 of the ITS) be given when no interest is paid or earned by the consumer (in line with point 4 of article 11 and point 10 of Article 12 of the same ITS).
Such a possibility, suggested by point 1 of article 5 of the PAD (“…/…as well as, where applicable, information regarding the interest rates…/…”) would allow to substantially lightening the SoF. For example, virtually all PSPs in France do not serve credit interest on payment accounts. Introducing this empty heading would confuse the consumer."
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.
Similarly to the proposed common symbol of the FID, we would also like to make some observations and a suggestion regarding the common symbol in the SoF template.1/ Observations:
o Although it is true that 52% of all consumers tested agreed that the proposed symbol makes the document distinguishable from other documentation, it is also worth noting that the remaining half of the respondents disagreed or did not know whether or not they perceived this to be true. This result reflecting a measured and clearly limited potential benefit to consumers has to be weighed against the potential important industrial cost required in order to meet the requirements of the ITS.
o Currently, the annual statement of fees that the French banks have been required to produce by law since 2009 is mainly printed in black and white by huge national document processing platforms using bulky rolls of paper with the graphics standards of the bank (logo and legal notices) printed beforehand and in colour. Printing only the common symbol in colour while the rest of the document would be printed in black and white would impose costly change in impression lines.
o In branches it is not always possible to print in colour, but it is a common practice to feed printers with a letterhead, which already includes the bank logo in colour.
2/ Suggestions:
o We would suggest softening the requirement set out in Art. 3(2) of the relevant ITS: All colour / black & white combinations between the logo of the PSP and the common symbol should be allowed to take into account the wide diversity of printing equipment available in branches and the industrial printing processes already in place. We believe that the document’s distinctiveness and readability will be ensured even if the document is printed with a common symbol displayed in black and white, should the logo of the PSP be printed in colour.
o The obligation to respect the same format (a square no larger than 2.5 cm x 2.5 cm) for the symbol and for the logo of the PSP is a too strong constraint. If a precise printing surface can be considered for the common symbol, the visual identity of certain PSPs, defined in their graphic charter, would hardly fit into a square of this size. We would therefore like to suggest that these requirements be adjusted to become less restrictive.
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 have comments on several articles :- Article 3: We would suggest softening the requirement set out in point 2 of this article. All colour / black & white combinations between the logo of the PSP and the common symbol should be allowed to take into account the wide diversity of printing equipment available in branches and the industrial printing processes already in place. Moreover, the softening of the requirement regarding the size of the logo of the PSP contained in the first paragraph should also be considered. Please refer to our answer to Question 10 for more details on this.
- Article 11: We would suggest that the EBA does away with the requirement to provide information on the content of the packages based on the fact that such a requirement is not contained in the provisions of the PAD. We would also suggest retaining the reference of a service used, more relevant for the consumer, and consistent with the PAD. We would also suggest that for purposes of clarity and better visibility they be allowed to be displayed, at the choice of the PSP, either in an additional column or as an additional fee line in credit complementing any statement of a fee charged.
Please refer to our answer to Question 9 for more details on this.
- Article 12: We would suggest retaining the reference of a service used, more relevant for the consumer, and consistent with the PAD. Given the fact that reductions/ discounts will be difficult to present in the SoF (except at the bottom of the document under the heading Additional information") we would also suggest that for purposes of clarity and better visibility they be allowed to be displayed, at the choice of the PSP, either in an additional column or as an additional fee line in credit complementing any statement of a fee charged. Please refer to our answer to Question 9 for more details on this.
- Article 13: We would suggest that the possibility to delete the table “Detail of interest paid on the account” be given when no interest is paid to the consumer. Please refer to our answer to Question 9 for more details on this.
- Article 14: We would suggest that the possibility to delete the table “Detail of interest earned on the account” be given when no interest is earned by the consumer. We would also suggest to delete the point 5 which appears redundant with point 7. Please refer to our answer to Question 9 for more details on this."
Question 12: Do you consider the proposed instructions for payment service providers on how to complete the SoF template, contained in Articles 2 to 16 of the draft ITS, to be clear and easy to follow? Please explain your reasoning.
- Article 3: Please refer to our answer to Question 10- Article 11: Please refer to our answer to Question 9
- Article 12: Please refer to our answer to Question 9
- Article 13 : Please refer to our answer to Question 9
- Article 14: Please refer to our answer to Question 9 and 11