During the night of 15th July, French MPs voted for an amendment to the Pacte Law (Law encouraging growth and the transformation of firms) bringing to an end the obligation for consumers to pay their salaries into a bank in exchange for getting a property loan. This came into force after a decree from 2017 on 1st January 2018. So, the government has been forced to make a U turn to ensure consumers are favoured.
Main bank account becomes part of the commercial deal
Roland Lescure, the LREM commission chairman could not hide his pleasure (according to Le Parisien): “Having your main bank account with the same bank is part of the negotiation process and should not be an obligation,” so this encourages the ability to transfer your bank account. Banks can no longer force their clients to pay their salary into their account for ten years in exchange for a commercial offer (reduced charges or interest rates…). This obligation came into conflict with consumer protection law in France and Europe. The Bank Users’ Association (Afub) took the case to court and the European Court of Justice became involved. To avoid action being taken by the EU court, MPs therefore added this amendment to the Pacte Law, which is due to come into force in early June.
The French banking federation unhappy
While consumers and clients are pleased about this amendment, that is not the case for French banks. The French Federation (FBC) told AFP they were unhappy with the inconsistency of the law. Others involved in the baking sector also reacted and questioned this amendment expressing their fears for banks. This obligation enabled some banks to ensure customer loyalty at a time when online banking is thriving and upsetting the traditional market.
Clients will have to wait and see what happens in June when they ask for a loan.
If you wish to invest in property, please contact the experts at Faubourg Immobilier and take a look at their property programmes.