The European Union's executive will propose new rules for bank fees after failing to persuade the industry to make its charges more transparent, a spokeswoman for the EU official in charge of regulating finance said on Monday.
"We will propose legislation on a framework for bank fees," said a spokeswoman for Michel Barnier. "There has been a process for the last year to try and sort this out via self-regulation with the banking industry but it's not worked."
"We want to make it easier for Europeans to be able to chose what's best on the market for them," she said, commenting on bank account costs. "Now, it is very difficult for them to do so."
The decision by Barnier, who is in charge of writing a host of rules for banks, means lenders face a new law that will force them to come clean on customer fees. The European Commission cannot, however, impose caps on what banks charge.
The proposal is set to come in 2012 but will require at least one year for the bloc's 27 countries and parliament to work through before it can be written into EU law.
Earlier this year, European Union banks were given a deadline of mid-September to improve the transparency of fees.
The Commission had wanted banks to use common terminology for current account services as well as to inform consumers about what they have been charged.
It is now hard to compare the charges on bank accounts around Europe, such as the fees imposed for keeping an account or withdrawing cash.
Full transparency would make it easier for customers to compare charges and switch to a cheaper account, helping to drive down the high charges seen in some states.
(Reporting By John O'Donnell)Copyright 2011 Thomson Reuters. Click for Restrictions.