Bank account ‘portability’ for employees pushed

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A BILL pushing to let private sector workers choose the bank for their payroll accounts has been filed at the House to give them freedom to weigh each lender’s benefits and to increase competition in the banking industry.

Marikina City (2nd district) Rep. Stella Luz A. Quimbo has filed House Bill 7619, also known as the Bank Account Portability for Workers Act, which gives private sector employees the freedom to choose their own bank accounts so they can transact “based on various factors, such as the attractiveness of their financial products, interest rates offered, and the location of their branches.”

The measure also seeks to strengthen competition among banks, Ms. Quimbo said. She said competition in the banking industry would result in the improvement of financial services and would make banks more responsive to the demands of clients.

“No bank shall secure more clients just because a single client — the employer — made the choice for others. This will force the banks to offer better financial products and more responsive and convenient services in order to attract more clients,” Ms. Quimbo said on Friday.

The lawmaker noted the current setup prevents healthy competition in the industry.

“By leaving it up to employers to decide on behalf of many, these competition dynamics are dampened in our current system,” she said.

Ms. Quimbo also noted that the Constitution prohibits “combinations in restraint of trade and unfair competition,” adding it is the mandate of the government to “protect the rights and welfare of workers.”

“Grant the employees their freedom of choice and we improve employee welfare,” she said.

The measure also seeks to make employees’ financial transactions “hassle-free” as a provision allows them to use their existing bank accounts for withdrawing their salaries, Ms. Quimbo added.

“It will allow them to use their existing personal bank accounts for withdrawing their wages without having to open a new account. Presumably, an employee picked his/her existing bank because s/he desires the services offered by that bank and due to the proximity from the employee’s residence. Hence, withdrawing their wages will now be hassle-free,” she said. — K.A.T. Atienza