In its annual report published on March 18, 2021, the French Audit Office (Cour des Comptes) denounces the administrative delays incurred by vulnerable customers in obtaining a free bank account. It also points to the opacity of the fees charged by credit institutions. Here's an update on banking inclusion, its mechanisms and the Court's recommendations for improvement.
Fear of more people without bank accounts
Almost three years after the "Gilets Jaunes" crisis, the subject of banking inclusion is back on the table. While in 2019, the Observatoire de l'inclusion bancaire was highlighting encouraging results, with the significant continuation of the decline in overindebtedness situations and the development of specific offerings for fragile customers, the Covid-19 crisis could change the game.
In its latest annual report, the French Audit Office (Cour des Comptes) sounds the alarm. According to the institution, "situations where people are deprived of a bank account, particularly as a result of payment incidents, could multiply".
A lack of information and transparency
The Cour des Comptes (French Audit Office) takes another look at the right-to-account procedure and the capping of charges for financially fragile customers.
With regard to the " right to an account" procedure, which involves the Banque de France automatically designating a bank to open a deposit account for a customer who is unable to do so, in accordance with the conditions laid down by law, the Cour des Comptes noted a number of shortcomings. Firstly, only half of applicants are informed of the existence of this procedure by the bank, and almost a third have difficulty obtaining the letter of refusal required to benefit from it. Secondly, some advisors refuse to open an account for people who are eligible.
In general, the institution deplores the "lack of transparency" surrounding charges for payment incidents and operating irregularities. This lack of information is "an obstacle to a proper understanding of difficulties that affect a quarter of retail customers every year, and more than two million customers in situations of financial fragility".
Room for improvement: recommendations from the Cour des Comptes
Fearing a future increase in the number of cases, the Cour des Comptes (French Audit Office) is recommending that the "droit au compte" procedure be dematerialized by 2022, in order to improve turnaround times and monitoring. The report also recommends that banks be obliged to inform their customers of the possibility of receiving support from specialized structures (budget advice points, associations, social action centers).
Finally, to better inform consumers and prevent overindebtedness, banks will be required to assess and monitor the amount of payment incident fees, operating irregularity fees and intervention fees paid by their customers.
Philippe Brassac, Chairman of the French Banking Federation (FBF), has already reacted to these recommendations, pointing out that France is one of the best-banked countries in Europe.