Questions about UK banks continue to pile up ahead of Brexit

Maria Nikolova

John Glen, Economic Secretary to the Treasury, faces questions about how UK banks would fulfill their obligations under the EU Payment Accounts Directive post-Brexit.

With Brexit less than two months away, the questions about the operations of the UK financial services industry after the UK leaves the European Union continue to grow in volume. Earlier today, John Glen, Economic Secretary to the Treasury, answered a question about how UK banks would meet their obligations under the EU Payment Accounts Directive post-Brexit.

Chris Ruane has asked the Chancellor of the Exchequer, what steps his Department is taking to ensure that UK banks fulfill their obligations under the EU Payment Accounts Directive; and whether he plans to retain the consumer protections in that directive after the UK leaves the EU.

In responde, John Glen explained that the Payment Accounts Directive 2014 has three main objectives: (1) to improve the transparency and comparability of fees related to payment accounts that are used for day-to-day payment transactions; (2) to facilitate the switching of those accounts; and (3) to ensure access to payment accounts with basic features for EU residents. The Payment Accounts Regulations 2015 (PARs) transposed this Directive into UK law.

The Financial Conduct Authority (FCA) is responsible for monitoring and enforcing the Payment Accounts Regulations’ requirements on payment service providers, John Glen said, whereas the Payment Systems Regulator (PSR) is responsible for designating and monitoring alternative switching schemes.

Designated UK banks have to provide accessible information and assistance about the features and conditions of basic bank accounts under the Payment Accounts Regulations (PARs). The PARs also require the FCA to gather and submit to HM Treasury certain data on basic bank accounts and the switching of payment accounts. This information is reported to HM Treasury every two years. HM Treasury also collects data on basic bank accounts and this is published on an annual basis.

“The Government has amended the PARs to ensure that they continue to operate effectively in the UK once the UK has left the EU”, John Glen noted.

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