The Malta Financial Services Authority (“MFSA”) has issued a consultation document entitled “Consultation on the Proposed Amendments to the Credit Institutions and Financial Institutions (Payments Accounts) Regulations (S.L.371.18)” (the ‘‘PAR’’) to present the proposed amendments to the industry and all relevant stakeholders. The PAR transpose the provisions of the Payment Accounts Directive 2014/92/EU (the “PAD”) which set common regulatory standards that the Member States are required to meet in order to:
- improve the transparency and comparability of fees related to payment accounts that are used for day-to-day payment transactions;
- facilitate switching of those accounts; and
- ensure access to bank accounts with basic features.
Snapshot of the Main Amendments to Malta Payment Accounts legislation
The aim of the MFSA’s proposed amendments to the PAR is to better align some of the provisions contained in the PAR to the PAD, while at the same time address some of the industry’s concerns. Some of the main proposed amendments are summarised below:
- Revision of the list of the most representative services linked to a payment account: The MFSA is proposing an amendment to the PAR in order to require the competent authority to publish the updated list of the most representative services linked to a payment account. The publication by the competent authority has to be done at the latest within three months of the entry into force of the changes adopted by the European Commission to the regulatory technical standards setting out the EU standardised terminology.
- Comparison websites: The PAD requires Member States to ensure that consumers have access, free of charge, to at least one website comparing fees charged by payment service providers. The PAD further provides Member States with the possibility to require comparison websites to include further comparative determinants relating to the level of service offered by the payment service provider. Accordingly, an amendment to the PAR is being proposed by the MFSA in order to provide the competent authority with the possibility to include such further comparative determinants should the need arise. Furthermore, an amendment in the PAR is being proposed in order to clarify the payment service providers’ duty to provide the relevant information to the competent authority.
- Genuine interest: The PAD provides Member States with the possibility to require consumers who wish to open a payment account with basic features in their territory to show a genuine interest in doing so. In this regard, the MFSA has revisited its position and is proposing an update in the PAR in order to bring it in line with the PAD. Furthermore, in order to ensure that such a provision is not used in a discriminatory manner, the MFSA is also proposing an amendment that requires credit institutions not to refuse to open a payment account with basic features on the basis of the consumers’ financial circumstances, including their employment status, level of income, credit history or personal bankruptcy.
- Overdraft facilities: The MFSA is proposing the possibility to allow credit institutions to provide, upon the consumer’s request, an overdraft facility in relation to a payment account with basic features. At this point in time, the MFSA is of the opinion not to implement the PAD’s provision which gives the possibility to Member States to define a maximum amount and a maximum duration of any such overdraft facility.
- Associated fees: The MFSA is proposing an amendment in order to remove the obligation on credit institutions to determine a minimum number of operations for which no fee shall be charged. The MFSA is of the opinion that this proposed change will allow credit institutions to offer a payment account with basic features without carrying out any substantial changes to their IT system.
- Framework contracts and termination: The MFSA is proposing that in the event of failure by the consumer to abide by the terms and conditions of the payment account, credit institutions may, in terms of the PAR (as amended), charge reasonable fees. Furthermore, the MFSA is also proposing specific cases where a framework contract for a payment account with basic features may be unilaterally terminated by credit institutions.
- Content of the fee information document: Whereas the PAR provide credit institutions with an option as to whether to include in the fee information document a list of the penalties which may be incurred by the consumer for the use of a payment account; another provision in the PAR makes such a requirement mandatory in relation to the statement of fees. In this regard, the MFSA is of the opinion that payment service providers should also be required to include in the fee information document the penalties which could be incurred for the use of a payment account. Accordingly, the MFSA is proposing an amendment in the PAR in order to convert the said option into a mandatory requirement.
- Presentational format of the fee information document and the statement of fees: The PAR require the fee information document and the statement of fees to be “written in Maltese and English or, if agreed by the consumer and payment service provider, in another language”. Following discussions with the industry and stakeholders, the MFSA is proposing to amend these provisions in order to require the fee information document and the statement of fees to be “written in English and, if requested by the consumer, in Maltese or, in any other language agreed upon by the consumer and the payment service provider”.
- Presentational format of the consumer’s authorisation to perform the switching service: Similar to the above amendment, the PAR is also being amended in order to require the consumer’s authorisation to perform the switching service to be “drawn up in English and, if requested by the consumer, in Maltese or, in any other language agreed upon by the consumer and the payment service provider.”
- Other: Other amendments to the text of the PAR are also being proposed in order to further align the provisions of the PAR with the relevant provisions of the PAD, to further clarify the text, as well as to remove any potential inconsistencies. In this regard, the MFSA has also amended and/or added a number of definitions.
The proposed amendments presented by the MFSA are not binding and are subject to further changes and improvements following receipt of feedback from the industry. In this regard, the MFSA has invited all relevant stakeholders to submit any feedback on the proposed amendments by the 6th of December 2017.
A copy of the consultation document can be found here while the proposed amendments can be viewed here.
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