Renewed General Banking Conditions Easier to Fathom

28 November 2016

Renewed General Banking Conditions Easier to Fathom

On 1 March 2017 the new General Banking Conditions (“GBC”) will enter into force. In close consultations with the Netherlands Bankers' Association (“NBA”), the Consumers Association, VNO-NCW, MKB-Nederland, LTO Nederland and ONL voor ondernemers, the GBC have been rewritten in such a way that people who are not legal experts can understand them better.

General Banking Conditions

The GBC contain the general ‘rules of play’ for the relationship between customer and bank. While Articles 1 up to and including 37 of the current GBC, dating back to 2009, are explained in a separate document, the explanation to the new GBC is incorporated in the articles themselves. In addition, even a short version of the GBC has been drafted in which the GBC are briefly described and explained in nine points using pictograms. It is not explained in the coverage of information why the NBA chose to make this short version. Perhaps the NBA did this because it knowns how hard it is to encourage customers to actually read information, as has also been confirmed in a recently published report of the AFM.

Substantive Changes

Besides the fact that the GBC have been written in easier language, also a number of substantive changes have been made. The most important changes are discussed below article by article:

Article 1: The short version stipulates that the GBC can be regarded as a kind of ‘constitution’: they apply to all products and services purchased from the bank. However, if special, product-specific conditions contain a provision that is in conflict with the GBC, this provision has precedence over the GBC. So far, nothing new under the sun. The new GBC stipulate, however, that the protection awarded to consumers in the GBC may not be diminished by provisions from special conditions.

Article 2: The new GBC now contain the explicit provision that banks aim for understandable products and services. In addition thereto, banks aim for understandable information about those products and services and their risks. The article about the duty of care has therefore been extended and is now in line with established case law in the field of the scope and substance of the duty of care of banks.

Article 5: As is also included in the current GBC, pursuant to Article 5 of the new GBC the bank may engage third parties in its provision of services and may contract out its work to third parties. What is new in this respect is that the GBC now stipulate that the bank nevertheless remains the point of contact and contracting party for the customer.

Article 28: In order to accommodate the wish of the employers' representatives, this article contains the obligation for banks to communicate in a clearer way about (the amount of) exceptional costs. These are, for example, valuation costs, consultancy fees or the costs of extra reports. Furthermore, a change has been included that when a statutory regime applies to exceptional costs, this regime must be applied. This means, for instance, that the bank, when it gets drawn into legal proceedings, can only claim compensation from the customer of the costs of the proceedings according to the applicable court-approved scale of costs, but not of the costs actually incurred by the bank.

Article 30: To conclude, the new GBC stipulate that communications from customers to the bank must be done in writing. The reasons behind this are evidentiary value and privacy, according to the NBA. This rule can be deviated from in consultations, for instance if a secured internet environment for internet banking services or email can be used.