When your bank charges what you consider to be excessive fees or refuses to close your account, do you know who regulates these practices? The banking sector is not a lawless area. In addition to the banker's general liabilityAs part of the European Union's supervisory framework, financial institutions are governed by specific mechanisms that provide a degree of oversight of their banking activities. Here's how the supervision of ethical rules specific to the banking sector in France.
Certification of codes of conduct
The power of approval of the Minister for the Economy
The Minister for the Economy has a key power: to approve the codes of conduct drawn up by professionals in the banking sector. This power derives from the Order of 5 December 2008, supplemented by the Banking and Financial Regulation Act of 22 October 2010. This approval transforms voluntary commitments into legally binding obligations for all the institutions concerned.
The certification procedure
The procedure follows a precise path:
- The professional associations draw up the code.
- They submit this code to the Minister.
- The Minister consults the Comité consultatif de la législation et de la réglementation financières (CCLRF).
- The code is approved by ministerial decree.
The CCLRF plays an important role. An unfavourable opinion from this committee obliges the Minister to request a second deliberation, as provided for in article L. 614-2 of the Monetary and Financial Code.
Extension to banking transactions
Initially limited to financial services and savings products, approval was extended to traditional banking transactions and payment services by the Act of 22 October 2010. Article L. 611-3-1 of the CMF states: "The Minister for the Economy may approve by order the codes of conduct that they have drawn up for the marketing of financial instruments, banking transactions and payment services". This extension illustrates the desire to harmonise ethical practices throughout the banking sector.
The role of the Autorité de contrôle prudentiel et de résolution (ACPR)
Monitoring codes of conduct
The ACPR closely monitors the codes of conduct drawn up by industry associations. Its first task is to check that they are compatible with the laws and regulations in force. This prior control is fundamental. It prevents the dissemination of ethical rules that are contrary to higher standards. Article L. 612-29-1 of the Monetary and Financial Code explicitly assigns this responsibility to the ACPR. In the event of non-compliance, the assistance of an lawyer competent to deal with the ACPR may be necessary.
Approval of codes drawn up by professional associations
In addition to simple monitoring, the ACPR may approve all or part of the codes drawn up by professional associations. This approval confers binding force on the provisions concerned for all members of the association. The approval procedure is governed by Articles R. 612-29-1 and R. 612-29-2 of the CMF:
- The ACPR has 4 months to reach a decision (which can be extended to 6 months).
- The approval decision is published in the Official Journal.
To be approved, a code must contain precise and concrete rules. Mere declarations of principle are not enough.
ACPR recommendations
The AMF may also issue recommendations setting out rules of best practice for marketing and customer protection. These recommendations have a special status in the regulatory arsenal. As the document on the ACPR's transparency policy states: "These recommendations are made at the initiative of the ACPR, they relate to an identified topic and consist of practical recommendations addressed to the supervised persons". Case in point: in 2011, the ACPR (then the ACP) issued Recommendation 2011-R-01 on the management of condominium trustee accounts, calling into question the so-called "mirror" accounts opened in the trustees' names.
Oversight by the Financial Sector Consultative Committee
Tasks and composition of the CCSF
The Financial Sector Consultative Committee (CCSF) brings together players from the financial sector, consumer associations and, since 2018, members of parliament. This diverse membership ensures a balanced representation of the interests involved. Article L. 614-1 of the French Monetary and Financial Code defines its remit. The CCSF plays an advisory role on issues affecting relations between financial institutions and their customers.
The changing role of the CCSF
The CCSF's prerogatives have expanded over time. Several texts have strengthened its role:
- The decree of 3 February 2011 increased the number of members.
- The decree of 5 November 2015 entrusted it with the management of a public comparator of bank charges.
- The decree of 7 December 2015 specified the procedures for appointing company mediators.
- The decree of 7 July 2017 broadened the scope of professional representation.
This development reflects the growing importance of the CCSF in the regulatory system for the banking sector.
Monitoring pricing practices
Since the Banking and Financial Regulation Act of 22 October 2010, the CCSF has been explicitly tasked with monitoring changes in the pricing practices of banking and payment institutions. Article L. 614-1 of the CMF stipulates that "the committee is responsible for monitoring changes in the pricing practices of credit and payment institutions for services offered to their individual customers who are not acting for professional purposes". Although this monitoring does not give the CCSF the power to impose penalties, it is proving effective. Observations made may be forwarded to the ACPR, which then monitors banks' compliance with their commitments.
Integrating ethical rules into internal control procedures
Legal requirements for internal control
Banking institutions must set up an effective internal control system. This obligation is now the result of the Order of 3 November 2014, which replaced Regulation 97-02 of the Comité de la réglementation bancaire et financière. This text requires credit institutions to check that their internal operations and procedures comply with all the provisions applicable to their activities.
Taking account of professional standards
Ethical rules are explicitly part of the scope of internal control. The Order of 3 November 2014 requires the control system to verify compliance with "professional and ethical standards". This integration of ethical rules into the internal control system is a powerful lever for ensuring their effective compliance. It gives institutions a sense of responsibility by forcing them to monitor their own practices. Understanding the mechanisms of penalties for breaches of ethical rules is also important.
Preventive role of internal control
Internal control plays an essential role in preventing breaches of ethical rules. By detecting and correcting breaches before they give rise to external sanctions, it protects both customers and the bank itself. Banks must put in place specific procedures to identify and manage potential conflicts of interest. This preventive approach is a useful complement to the repressive measures implemented by the ACPR.
If you find that a bank is not complying with its ethical obligations, you can refer the matter to the ACPR or the banking ombudsman. In some cases, the services of a specialist lawyer may be necessary to defend your rights.
Sources
- Monetary and Financial Code, articles L. 611-3-1, L. 612-1, L. 612-29-1, L. 612-30, L. 612-31, L. 614-1, L. 614-2, R. 612-29-1 and R. 612-29-2
- Order no. 2008-1271 of 5 December 2008 on the introduction of codes of conduct
- Law no. 2010-1249 of 22 October 2010 on banking and financial regulation Order of 3 November 2014 on the internal control of companies in the banking sector
- ACPR transparency policy document, July 2011, updated in June 2017
- ACP Recommendation No. 2011-R-01 of 26 January 2011 on the management of trustee accounts F. Bordas and S. Maouche,
- "Devoirs professionnels des établissements de crédit - Déontologie en matière d'opérations de banque - Conflits d'intérêts", JurisClasseur Droit bancaire et financier, Fasc. 140, 30 September 2019
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