Obligation of a bank to provide a bank account to a non-consumer customer

The Supreme Court recently issued a judgment (HR 5 November 2021, ECLI:NL:HR:2021:1652) stating that banks cannot simply refuse non-consumer customers that want to establish or maintain a bank account.

Background

Yin Yang c.s. (Yin Yang) is a group of companies that (in short) operate a sauna club. Yin Yang has several business accounts with ING Bank N.V. (ING) and also an agreement with ING to deposit cash, the so-called ‘verpakt afstorten' agreement (the deposit agreement). In 2016, a search of Yin Yang's premises by the police took place. The police found, among other things, cash, drugs and weapons during the search. As a result, Yin Yang was mentioned in the media several times.

Following the police search, ING carried out a customer survey. That investigation showed that Yin Yang deposited almost € 5 million in cash with ING in one year, compared to almost € 1 million in debit card transactions in the same period of time. According to ING, Yin Yang provided insufficient information to the bank for it to be able to trace the origin of the cash. As a result, ING cannot guarantee supervisors that its accounts are not used for money laundering. ING therefore announces by letter dated 10 March 2017 that it is terminating the deposit agreement with immediate effect. In addition, by letter dated 14 April 2017, ING notifies Yin Yang that it wishes to terminate the banking relationship because ING no longer has confidence in continuing the banking relationship.

Subsequently, Yin Yang demanded in summary proceedings that ING should continue the banking relationship. The district court denied Yin Yang's requests, but in appeal the court of appeal reversed this judgment and ordered ING to continue the banking relationship until 1 January 2018. In the following period, Yin Yang takes various measures to reduce integrity risks and tries to open a bank account at other banks, but without any success.

Meanwhile, the Public Prosecutor's Office informed the two directors of Yin Yang that a criminal investigation was launched against them in connection with money laundering. Eventually, by letter of 8 November 2017, ING terminates the banking relationship with Yin Yang as of 1 January 2018. Yin Yang thereupon commences summary proceedings and claims (once again) continuation of the banking relationship with ING and continuation of the deposit agreement . The district court again denied this claim. This time the court of appeal largely upheld that judgment, but did order ING to continue the banking relationship and the deposit agreement  on packed deposits up to and including 16 February 2018.

In the summer of 2018, a settlement was reached between the two directors of Yin Yang and the Public Prosecutor’s Office regarding the suspicion of exchanging cash three times without having a valid license in respect thereof. As to the other (presumed) criminal acts, the Public Prosecutor's Office dismissed the criminal case against Yin Yang and its directors. Despite the dismissal, ING refuses to continue or reinstate the deposit agreement  and the banking relationship with Yin Yang.

Yin Yang again commenced summary proceedings and claimed that ING should be ordered to continue or reinstate the  deposit agreement and the banking relationship with Yin Yang. This time the court granted the claims, on the condition that, with respect to the  deposit agreement, Yin Yang meets certain conditions. ING subsequently argued that Yin Yang did not meet those conditions and did not reinstate the  deposit agreement. Subsequently, again summary proceedings were held in which ING was ordered in the first instance (in brief) to continue or restore the deposit agreement and the banking relationship with Yin Yang. However, things went wrong for Yin Yang in appeal. ING subsequently announced that it would proceed with the settlement of all of Yin Yang's accounts involved. Yin Yang then claimed again in summary proceedings that ING should be ordered to continue or reinstate the repayment agreement and the banking relationship with Yin Yang.

Summary proceedings and appeal

In these final summary proceedings the court denied the claims. In appeal, the court of appeal interpreted Yin Yang's claims as requesting that ING will be ordered to enter into a new banking relationship and a new agreement for packaged deposits. The court of appeal set aside the judgment in first instance and ordered ING to enable Yin Yang to maintain a bank account with ING, without obliging ING to offer a facility for depositing cash.

In doing so, the court of appeal considered the interests of, on the one hand, the principle of freedom of contract, on the basis of which everyone has the right not to be obliged to enter into a contractual relationship with another person, and, on the other hand, the social function of banks, on the basis of which banks have a special duty of care towards third parties whose interests banks must take into account on the basis of what is customary in social and economic life according to generally accepted standards. The court of appeal points out that not having a bank account makes it virtually impossible to participate in society. In this respect, the court of appeal referred to section 4:71f of the Financial Supervision Act. This section obliges banks within the EU to provide consumers the opportunity to open a bank account. It acknowledges that this section applies to consumers and not to legal entities such as Yin Yang, but according to the court of appeal this does not mean that ING's contractual freedom in respect of Yin Yang is unlimited. Therefore, according to the court of appeal, ING may also be obliged, under special circumstances, to enter into a banking relationship with a legal person.

The court of appeal then assessed, considering the circumstances of the case at that moment in time, whether ING is obliged to do so and came to the conclusion that this is the case as far as it concerns providing a bank account. However, ING is not obliged to also offer a facility for depositing cash. In respect of the latter, the court of appeal argued (in short) that the money-laundering and integrity risks for ING are too great in this specific case where Yin Yang fails to check the identity of its customers, register personal data, many cash payments are made and Yin Yang operates in an integrity-sensitive relax sector. In addition, the court of appeal considered Yin Yang can also participate in society without the agreement to make cash deposits.

Considerations of the Supreme Court

The Supreme Court confirmed the correctness of the starting point taken by the court of appeal that banks may have a duty to provide a non-consumer customer a bank account given their social position and function. It is virtually impossible, even as a business, to participate in society without having a bank account. The Supreme Court recognized that banks may have a legitimate interest in refusing certain customers because of supervisory requirements or integrity risks and that this interest may prevent a bank from being obliged to provide a bank account to a customer. Unlike ING, however, the supreme court is of the opinion that the court of appeal weighed up these interests and did not motivated its decision incomprehensibly or insufficiently.

Conclusion

The Supreme Court clarified that a bank may be obliged to offer customers a bank account, even when these clients do not qualify as consumers. A bank should balance the interests involved, whereby the bank has an interest in the principle of freedom of contract being respected and the bank's client has an interest in being able to establish and maintain a bank account so that it can participate in society.

If you are having difficulties with opening or maintaining a bank account or if you have questions in relation thereto, you can contact Lucas Lustermans (l.lustermans@ploum.nl or +31619850096) or Joost Kool (j.kool@ploum.nl or +31610177339).