In the current context of low interest rates, the Plan d'Epargne Logement (PEL), which pays an average of 2.65%, has become an expensive product and a source of problems for banks. On March 31, 2021, the consumer association UFC-Que Choisir took legal action against Banque Postale. It accuses the bank of forcing its PEL customers to open a current account at the same time.
The PEL, a costly savings product for banks
The PEL was originally designed to encourage households to save for the downpayment required to obtain a mortgage.
Until the early 1990s, the PEL offered an average interest rate of 6%, and enabled its holder to take out a home loan at 6.32% after 10 years, whereas average rates at the time were much higher, often in excess of 11%.
Both banks and savers benefited, but the former have not been able to do so for several years now. While all PELs opened before 2011 can no longer be topped up after the 10-year savings phase, they can be held for an unlimited period at the rate in effect when they were opened.
Problem: in the current context of historically low interest rates, the old PELs, which represent 20% of all existing PELs, have become very expensive for banks. PELs opened before 2003 yield an average of 3.27% per annum, while those opened up to the mid-1990s pay over 6%.
The average remuneration of PELs, which varies according to when they are opened, is currently 2.65%. At the end of 2018, there were 14.3 million PELs open, with 276.4 billion euros in outstandings, forcing banks to pay their customers over 7 billion euros in remuneration each year.
UFC-Que Choisir takes La Banque Postale to court
On March 31, 2021, the consumer association UFC-Que Choisir decided to take legal action against Banque Postale before the Paris Magistrates' Court. It accuses the bank of forcing its PEL customers to open a current account at the same time, on pain of closing their Plan d'Epargne Logement.
"However, the PEL is a free product and there is no legal requirement for its holder to also open a current account with the bank concerned," states UFC-Que Choisir in a press release.
According to the consumer association, in order to keep their PEL, La Banque Postale customers are forced to open a current account with the same bank, "at a cost of at least €13.20 a year, and which can be invoiced at close to €100".
According to the association, all customers who refused this requirement had their PELs closed. Banque Postale refutes this claim, stating that it only asked the customers concerned to comply with the regulations by making regular payments into their PEL within 2 months.
Be that as it may, the remuneration of PELs, particularly those opened before 2011, is a cause for concern in the financial sector. In October 2020, the Banque de France said it was "concerned". At the time, Governor François Villeroy de Galhau stated that these products were "weighing on the financing of the French economy".