Frankfurt, Berlin The German banks and savings banks want to get rid of the approval requirement for fee increases. They are aiming for an amendment to the German Civil Code, according to which price increases for current accounts would be possible without the explicit consent of customers – as was the case two years ago. This emerges from a position paper by the German banking industry (DK), which is available to the Handelsblatt.
From the point of view of the financial institutions, the current situation requires action by the legislator. A model of express consent to contract changes is not suitable for the masses and “for customers it is more of an unnecessary impertinence than an improvement,” says the DK paper.
“We want a solution that is practical for everyone involved,” said Daniel Quinten, board member of the Federal Association of Volks- und Raiffeisenbanken (BVR), the Handelsblatt. The obligation to approve every change to the General Terms and Conditions (GTC) burdens both credit institutions and consumers with more complexity and bureaucracy.
The background to the DK initiative is a judgment by the Federal Court of Justice (BGH) in April 2021. According to this, financial institutions must obtain the express consent of their customers for changes to the general terms and conditions, for example price increases (Az. XI ZR 26/20). At that time, the Federal Association of Consumers had sued the Postbank, which had raised prices several times in recent years.
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Up until this judgment, banks and savings banks had usually increased the fees via the existing terms and conditions clauses. They assumed that customers would tacitly consent if they did not object to a change within two months. Since very similar general terms and conditions are used in the German banking industry, the BGH decision is considered to be decisive for the entire industry.
The first money houses terminate thousands of accounts
For financial institutions, the 2021 judgment means that they are obliged to obtain nationwide approval from their customers for recently announced fee increases. They also need customer consent for all price increases implemented within three years prior to the verdict.
It is also relevant for future price adjustments, which is causing the banks concern. In view of the high inflation and rising material costs at many financial institutions, they would actually like to further adjust the prices for their current accounts.
>> Read more here: More and more banks and savings banks are canceling customers’ bank accounts
This is going less smoothly than the banks would hope. Because some of the customers – usually three to ten percent – do not agree to the terms and conditions even after numerous requests from the banks. More and more banks and savings banks are now canceling their checking accounts.
On Wednesday it was announced that the Sparkasse Köln-Bonn, one of the five largest savings banks in the country, had sent termination letters to 38,000 customers. The Sparkasse Nürnberg sent around 10,000 cancellations at the end of last year.
“Banks do not want to terminate current accounts or other contracts. But according to the BGH ruling, banks cannot continue to run current accounts without agreeing to the terms and conditions and must therefore terminate them at some point,” said Quinten. The BVR is currently in charge of the DK. According to Quinten, the fact that an institute maintains uniform contracts with all customers is also a concern of the financial regulator Bafin.
The Justice Department is still considering the proposal
However, it is questionable whether the financial sector will receive sufficient political support with its proposal. On request, the Federal Ministry of Justice stated that it was currently examining whether an amendment to the general terms and conditions law would be advisable in light of the BGH ruling. “This review is not yet complete.” The subject of the review is also the proposal from the banking industry.
The ministry had made similar statements in the past. Because talks between the financial sector and politics have been going on for a long time. According to its own statements, the DK has revised its exact position several times.
Specifically, the banking associations that have joined forces in the DK are now proposing that Section 675g of the German Civil Code (BGB) be supplemented. The result would be that at least price increases for current accounts that are already subject to a fee would again be possible without approval. Ultimately, this would stipulate that an increase in fees without explicit consent does not mean that consumers are placed at an unreasonable disadvantage.
The DK assesses the case differently when a bank charges fees for the first time. “The first introduction of a fee requires the express consent of the payment service user,” says the DK proposal to supplement the BGB.
Even this “small solution would remedy the current misery in the case of long-term banking obligations and also take account of consumer protection,” says the DK. They also want a debate about “what real consumer protection really means,” explains Quinten, explaining the banks’ view. Because the BGH judgment did not lead to more consumer protection.
“Ultimately, account management and account switching can become more expensive as a result.” In an expert opinion for the DK, law professor Matthias Casper assumes that banks will pass on the greater effort involved in obtaining approval in the form of higher fees to customers.
After all, the financial sector can count on the backing of the Union parties. At the end of last year, the CDU/CSU parliamentary group submitted a motion for a change in the law that goes in the same direction as the DK proposal. It also aims to supplement §675g BGB.
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