Successful lawsuit
Another verdict against negative interest rates: will the “custody fees” be abolished now?
Negative interest rates for private savers are legally controversial
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For the second time, a court has declared negative interest on bank deposits to be inadmissible. What does the ruling mean for bank customers?
Can banks charge negative interest on normal current account balances? This issue is currently the subject of several court cases. Now, within a few weeks, the second dish has sided with the customers. After the Berlin Regional Court had already declared negative interest rates to be inadmissible at the end of October, the Düsseldorf Regional Court followed suit: The Düsseldorf judges consider a so-called custody fee from Volksbank Rhein-Lippe to be inadmissible (Az. 12 O 34/21).
The Federal Association of Consumer Organizations (vzbv) had filed a complaint, which has now made the decision made public at the end of December. “With the judgment of the Düsseldorf Regional Court against the price clauses of the Volksbank Rhein-Lippe, we have achieved another success. The second regional court in our proceedings has already ruled that banks are not allowed to charge penalty interest for credit balances in current accounts,” says David Bode, legal expert at vzbv.
Negative interest judgments not yet final
The current case is about negative interest of 0.5 percent, which Volksbank Rhein-Lippe introduced in April 2020 for deposits of more than 10,000 euros. The judges overturned this price clause. Since the safekeeping of money is not an additional special service, no separate fee may be demanded for it. The bank already charges a general account management fee for checking accounts. The custody fee means a uniform service. a double reward.
The Berlin Regional Court argued the same way in its decision against Sparda-Bank Berlin (Az. 16 O43/21). This had also demanded a custody fee from customers with current and call money accounts above a certain amount. The court ruled that the clause put customers at an unreasonable disadvantage, thereby upholding vzbv’s claim.
However, this does not yet mean a general ban on negative interest rates for consumers. Both judgments are not yet final. In the Berlin verdict, Sparda-Bank announced that it would appeal. In the Düsseldorf case, the vzbv itself appealed because it was not entirely right. For formal reasons, the judges had refused to order the Volksbank directly to reimburse the custody fees.
Consumer advocates see “stage victory”
The verdicts on negative interest rates are highly explosive. In the past year, more and more financial institutions have started to pass on the European Central Bank’s negative interest rates to their customers. The consumer portal Biallo recently counted 555 banks and savings banks that demand negative interest from private customers. If the penalty interest initially only applied to new customers, more and more existing customers are now also being affected, especially since many financial institutions are also reducing the allowances.
The Federation of German Consumer Organizations is now attempting to have negative interest rates banned in principle with parallel lawsuits against various institutes. The verdicts in Berlin and Düsseldorf are therefore only a “stage victory”, explained the vzbv. “We want to have the legal situation clarified in principle and have therefore sued several banks at different court locations,” says consumer advocate Bode.
In a further procedure, the vzbv suffered a minor legal setback. Almost at the same time as the Düsseldorf judgment, the Cologne Regional Court dismissed a lawsuit against a custody fee from Sparkasse Köln-Bonn (Az. 21 O328/21). The Sparkasse had previously accepted a warning from consumer advocates, removed the negative interest clause and thus avoided a conviction. But that’s not enough for vzbv, he has also appealed here.