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Money BGH judgment on bank fees: the basic account must not be too expensive

16:31  30 june  2020
16:31  30 june  2020 Source:   tagesspiegel.de

Deutsche Bank has to offer a cheaper basic account

 Deutsche Bank has to offer a cheaper basic account Karlsruhe. The Federal Court of Justice protects users of a so-called basic account for low-income people from excessive fees. Deutsche Bank may no longer offer its basic account for EUR 8.99 a month as before. © Arne Dedert The headquarters of Deutsche Bank in Frankfurt. According to the law, the costs must be reasonable.

Most basic checking accounts will charge a monthly service fee unless customers maintain a certain account balance or post a monthly direct deposit. However, many banks ’ electronic transfer systems recognize other types of transfers as direct deposits too . Bank transfers initiated through other

Ally Bank ’s free Interest Checking account is a solid offering that can meet your needs for an everyday checking account . But when you pay hefty ATM fees , cash becomes expensive . Some banks might add perks at different service levels, but most people are fine with the basic free option (or the

Homeless people and recipients of social welfare also have the right to have an account. The banks are not allowed to cash in excessively, judges the BGH.

Auch wer wenig oder kein Einkommen hat, hat ein Recht auf ein Konto. © Photo: dpa Even those who have little or no income have the right to have an account.

It is a vicious circle for those affected: If you do not get an account with the bank, you will not find an apartment - in the worst case, you will not find a job. For four years now, everyone in Germany has the right to an account. The financial institutions are also not allowed to reject homeless people or refugees. The banks have to offer them at least a basic account. But what can that cost?

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Banks will use this credit check, plus data on your application form, to decide whether to accept or reject you for the account you applied for. Make sure you ask for the basic bank account application forms specifically, or you'll get standard ones for standard bank accounts and then most

Do not use too many paragraphs. If paragraphs are very short, this may mean that the writer has either introduced ideas without developing them, or separated one idea over several paragraphs. reading online versus reading a book. provide several chapters to read free. is not replaced by it.

Deutsche Bank charges 8.99 euros per month for this. That is too much, as the Federal Court of Justice (BGH) has now determined. The top judges are right in favor of the consumer advocates who had sued for the high fees for the basic account.

The bankers had always argued that keeping such an account would ultimately mean additional work for them. However, the judges now declared that the financial institutions should not pass these costs on to those affected alone.

What it is about

A basic account is intended for people who have no regular income. They can be homeless, refugees or social assistance recipients. Thanks to this account, they too should be able to carry out basic banking transactions: i.e. deposit and withdraw money, arrange transfers or pay by card in the shop.

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Insufficient funds is a banking term for when your account does not have enough money available Fees pile up: When you have insufficient funds, your bank will charge you a fee —usually between There’s often a penalty for failed electronic payments, too . And if you bounce several checks in a row

Unlike personal bank accounts , which are typically free of costs if you are in credit, business accounts usually charge per transaction on top of a monthly account fee . However, even if you are not legally obliged to, keeping the two separate makes it easier to manage cash flow and calculate tax liabilities

Unlike with a normal account, customers do not need a permanent residence for this. It is sufficient to store a contact address, such as that of a relative or an advice center.

Such an account is kept purely on a credit basis. So customers can't overdraw it.

This Jedermann account has existed in Germany for decades - but after Postbank was privatized, customers no longer had any legal rights to it. From then on there was only a voluntary commitment on the part of the banks, which declared that they wanted to offer everyone a basic account. It was only in 2016 that the right to an account with the implementation of an EU directive was legally enshrined in Germany.

What there is a dispute about

However, it was not determined at the time that

what such an account could cost The legislator simply asked that the price be "reasonable". The banks interpret this very differently to this day. This was recently shown in a report by the Stiftung Warentest. She examined 185 basic accounts - and found just two that were free of charge. For all others, the price fluctuated between five euros and more than 200 euros a year.

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Chase Military Banking benefits are available on Chase Business Complete Checking Accounts for current service members and veterans of our nation’s • If you refund a payment in part, transaction fees will not be returned • You agree to reimburse us for all fines, fees , penalties, liabilities, or other

Owning a car is expensive even after you’ve paid off the initial cost. Public transit may be more accommodating to lower income tiers, but it isn’t always available in every city. Fees for not being able to pay a fee . A person can drown in the various fees that disproportionately hurt poor families.

The costs are so high in part because

transfers via form or telephone cost extra. At Deutsche Banken, for example, customers pay an additional 1.50 euros each time for the basic account. That is getting better. Especially since the account management fees alone add up to EUR 107.88 a year. For someone who doesn't have a regular income, that's a lot.

The banks have always justified the high costs with the additional effort they have with such an account. Deutsche Bank calculated this in detail for the court. For example, opening an account is more complex. The consultants would also have to pay more attention to the basic account to ensure that it is not misused - for example for money laundering or terrorist financing.

consumer advocates, on the other hand, have argued that there are fewer movements in the accounts of financially weaker customers. Also, many young immigrants, for example, are quite firm with their smartphones and do their banking online independently.

What the court says

The BGH judges have now declared that the banks should not charge the higher costs solely to the users of the basic accounts. "Rather, these costs must be generated by the institutes through the performance prices that can be achieved in free competition," it says in the explanatory statement.

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Best packaged accounts . App-based banking . Basic bank accounts . Once your application has been processed, tuition fees are automatically paid by the Student Loans Company. And there is a loan for living costs too . Full-time students only need to start repaying these loans at the earliest in

The account would preferably charge no fees or have monthly minimums, but I would like to be able to access it online. Assuming that you are not resident in Hong Kong, I would try with HSBC, Standard Chartered, Citibank and Bank of China (in that order), which are the most internationally-minded banks .

With the judgment, the judges are right for the consumer advocates who have sued the high fees. The Federal Consumer Association (VZBV) speaks of "a signal for the entire industry". The ruling strengthened the rights for financially weaker consumers such as Hartz IV recipients, homeless people or refugees. "Banks shouldn't collect unnecessarily much from those who already have little," said VZBV board member Klaus Müller.

He is not yet completely satisfied. In his opinion, the federal government is now required. It leaves the banks "too much leeway in the price calculation". Because there is still no upper limit on how much a basic account can cost. This is also criticized by Greens politician Sven Giegold: "It is highly problematic that banks can continue to charge substantial fees for the management of basic accounts," he says. This would continue to exclude low-income citizens from financial services. Giegold called on the federal government to improve the relevant law. "The EU Commission should initiate infringement proceedings against Germany if necessary."

KfW has to borrow less money on the capital market .
© Reuters / RALPH ORLOWSKI The logo of KfW Bank is pictured at the bank's headquarters in Frankfurt Frankfurt (Reuters) - The governmental development bank KfW has to borrow less money on the capital market despite the multi-billion dollar Corona aid programs because she shot herself other sources of funding. The volume of the planned bond issues was reduced by ten billion to 65 billion euros, said KfW on Thursday.

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