Published On: Wed, Jan 12th, 2022

Draft banking law contains debatable provisions

PHILIPSBURG — The draft bank account law that Member of Parliament Rolando Brison (UP) sent to the media this week contains a couple of interesting but debatable provisions. The apparent objective of the draft is to improve the banking sector’s customer service.

The draft opens with a reference to a European Union guideline that gives European citizens the right to a basic bank account. While this seems logical, it is a fact that St. Maarten is not a part of the European Union; that triggers the question up to what point such a guideline is applicable to the citizens of St. Maarten. The draft stipulates in article 2 that banks have to offer on request basic bank accounts to “consumers who legally reside in St. Maarten.” This seems to exclude the current possibility of having a non-resident account at a local bank.

Related article: Update on the right to a bank account

The draft obliges banks to offer this service without considering the nationality or the economic standing of the consumer. The banks would also have to abide by article 16 of the constitution that regulates the equality-principle.

Furthermore, the draft obliges banks to open these basic bank accounts not later than fifteen working days after reception of a completed request. Under 2.6 the draft states: The bank offers these services without cost or against a maximum amount established in a ministerial decree.”

The bank is allowed to refuse opening an account if there is a conflict with legislation related to money laundering and the financing of terrorism.

Banks can also refuse to open accounts for consumers who have been irrevocably sentenced less than two years ago for six specific crimes: forgery, providing incorrect information, fraud, fraudulent bankruptcy and money laundering. Consumers who have committed murder, robbery or theft are in this draft not excluded from access to bank accounts.

The draft furthermore limits the reasons why a bank is allowed to close an account. Reason one: if there have been no activities on the account for more than 24 months. Reason two: if the accountholder does not reside legally in St. Maarten anymore for more than 24 consecutive months. Reason three: if the accountholder has provided incorrect or incomplete information to gain access to a bank account. Banks have to give a two-month notice if they intend to close an account.

These particular provisions go further than what is usual in the banking sector. For instance, the general conditions of the Maduro and Curiel Bank in Curacao state in article 37: “The bank is not obliged to continue a relationship with a client with whom they no longer wish to do business.” The Windward Islands Bank in St. Maarten is part of Maduro Curiel’s Group.

Brison’s draft goes much further by stipulating that banks are not allowed to unilaterally terminate a banking relationship “without a preceding irrevocable court ruling that approves the termination of that relationship.”

To protect consumers, the draft speaks of the establishment of a Bureau Consumer Protection Finances and Banking. This bureau is to be financed by the ministry of finance. It is unclear what the cost of such a bureau would be, because the draft does not contain a financial paragraph.

The banking sector is bound by general binding rules established by the Central Bank of Curacao and St. Maarten. Banks are for instance obliged to establish the identity, nature and background of their clients. These general binding rules have to be submitted to the ministers of finance of the countries for approval.


Related articles:
Update on the right to a bank account