Bank Fee Regulation: Governor Confirms Parliament Holds Power Over Caps

The Banco de Portugal cannot set ceilings on banking fees—that power rests solely with Portugal's parliament. Governor Álvaro Santos Pereira confirmed this during a parliamentary hearing on 1 April 2026, clarifying the regulatory boundaries between the central bank and lawmakers. The session, prompted by inquiries from the PCP, PS, and CH parliamentary groups, centered on the so-called "banking cartel" case and questions about banking fee structures.

Why This Matters

• Regulatory limits clarified: Only Portugal's Assembly can impose caps on bank fees—the central bank lacks this authority and can only enforce existing rules.

• €65M in refunds: Between 2019 and 2025, the regulator forced banks to reimburse over 65 million euros in improperly charged commissions and interest.

• Prescription period challenges: Legal procedures allow successive appeals until cases expire, a systemic limitation that Santos Pereira identified as problematic.

• Commissions = 20% of bank revenue: Fee income represents a fifth of total banking sector earnings, reflecting the economic stakes in any fee regulation debate.

The Regulator's Boundaries

Santos Pereira's testimony drew a clear line between supervisory oversight and price regulation. "Banks are free to set prices for the products and services they sell, except where the law establishes specific prohibitions or limits," he stated. The Banco de Portugal can audit, sanction misconduct, and enforce transparency, but it cannot dictate what institutions charge for maintenance fees, transfers, or other retail products.

This jurisdictional boundary places the responsibility for fee limits with Portugal's legislators, who must weigh consumer protection against financial sector profitability. Fee income—roughly 20% of aggregate banking revenue—funds branch networks, digital infrastructure, and operational costs. Any proposed cap would require detailed economic analysis and legislative debate.

Santos Pereira underscored the regulator's enforcement track record: more than €65M returned to customers over six years for charges that violated existing rules. The figure covers commissions, expenses, and interest improperly applied by supervised institutions, demonstrating that the central bank enforces rules within its current authority.

The Prescription Problem

The governor highlighted a broader systemic challenge: the prescription of legal proceedings in financial cases. He described as "problematic" a situation in which defendants can file successive appeals until statutes of limitation expire, effectively limiting enforcement outcomes. "This is a matter for the courts and the legislature," Santos Pereira stated. "It is not the responsibility of the Banco de Portugal or the Competition Authority."

The banking cartel case exemplifies this issue. In February 2025, the Lisbon Court of Appeal ruled that the €225M in fines levied against 14 banks were time-barred, finding that infractions dating from 2002 to 2013 had exceeded the 10.5-year maximum prescription period under the 2012 competition law. The Autoridade da Concorrência (AdC) has pledged to appeal, but the situation reflects broader concerns about how procedural timelines affect enforcement in complex financial cases.

What the Cartel Entailed

The AdC investigation, initiated in 2012 after a Barclays disclosure, found that banks exchanged detailed, non-public information on future spreads, risk variables, and monthly production data for retail credit products—including mortgages, consumer loans, and business lending. The regulator concluded this coordination "discouraged banks from offering better terms to clients, eliminating competitive pressure."

Originally, 14 institutions faced sanctions: Caixa Geral de Depósitos (CGD), BCP, Santander, BPI, Montepio, BBVA, BIC (for BPN practices), Banif, Barclays, Caixa de Crédito Agrícola, Deutsche Bank, Banco Popular, UCI, and the former BES. Despite judicial confirmation of the infraction at both national and European levels, the prescription ruling affected penalty enforcement.

Consumer associations, notably Ius Omnibus, are pursuing civil indemnity actions that could theoretically yield €5.4 billion in compensation for affected clients through 2022 alone. Lawsuits have already been filed against Abanca and Deutsche Bank.

Political and Regulatory Responses

During parliamentary hearings in March 2026, bank executives mounted a defense. Abanca and BBVA representatives argued that information exchanges were sporadic, often publicly available, and did not harm customers. Luís Castro e Almeida of BBVA Portugal claimed his institution offered some of the lowest spreads in the market. Paulo Macedo of CGD noted that the now-expired €82M fine had weighed on the state-owned bank's accounts.

The AdC sharply rebutted these statements, noting that the conduct had been "judicially proven." Santos Pereira acknowledged that the behavior "deserves scrutiny and everything must be done to prevent a recurrence."

Yet without meaningful judicial or legislative reform, questions remain about deterring future coordination. Santos Pereira positioned the central bank as committed to oversight within existing frameworks: "Our supervision will remain demanding," he stated, noting attention to credit risk and macroeconomic conditions amid ongoing geopolitical developments.

Current Protections for Account Holders

For anyone holding a Portuguese bank account—whether resident, expat, or investor—the governor's testimony clarifies that fee regulation requires legislative action. Current Portuguese law does impose consumer protections in specific areas:

• Basic payment accounts: These accounts, available to all consumers, carry a maximum annual fee of roughly €14.52 (inflation-adjusted). You qualify automatically if you don't have a bank account; many banks waive or reduce this fee for salary or pension deposits.

• Mortgage processing fees: Processing fees for new mortgage loans are limited to a single analysis charge; monthly installment processing commissions were abolished.

• Small transfers via fintech apps: Transfers under €30 via MBWay and similar services cannot incur fees, provided monthly limits (€150 or 25 transactions) are not exceeded.

• ATM withdrawals in euros: Withdrawals in euros within the European Economic Area are commission-free for debit transactions.

However, many everyday charges—monthly account maintenance, paper statement fees, currency conversion margins—remain at individual bank discretion. The legislature could follow models in France or the United Kingdom, where authorities have greater regulatory scope over pricing, but such changes would require new legislation.

Reforms in Progress

Santos Pereira highlighted proactive steps the regulator is taking. The Banco de Portugal is currently overhauling its fee comparison tool, expanding coverage to savings products and potentially other financial instruments. The goal is to enhance transparency and help consumers compare options across providers.

The central bank also set a 0.75% countercyclical capital buffer and designated seven banking groups as Other Systemically Important Institutions (O-SIIs), both effective 1 January 2026. New anti-money laundering rules under EU Regulation 2024/1624 and updated Central Credit Register procedures further strengthen oversight of credit transfers and non-performing loans.

Santos Pereira noted that continued vigilance is necessary: "We live in times of great uncertainty, marked by armed conflicts and geopolitical tensions." He emphasized the need for proactive risk management and stated that while the system is more resilient than a decade ago, it faces evolving challenges.

European Context

Portugal's fee regime reflects regional variation. Spain and France see many banks waive transfer fees for standard or instant SEPA payments, while Germany and the Netherlands impose few statutory caps, relying primarily on market competition. Italy introduced a windfall tax on bank net interest margins, and the United Kingdom's Financial Conduct Authority has encouraged institutions to offer fairer deposit rates.

The EU Payment Accounts Directive (2014/92/EU) mandates transparency and comparability but does not include price controls. As a result, national parliaments retain discretion—the point Santos Pereira emphasized. Portugal could legislate fee ceilings, as it has for mortgage and transfer scenarios, but broader regulations would require legislative action and policy consideration.

Next Steps

With the banking cartel fines effectively annulled by prescription and the Banco de Portugal unable to impose fee caps, responsibility for fee regulation rests with Portugal's Assembly. Consumer groups and opposition parties have called for tighter fee regulation, but translating such proposals into legislation involves complex policy deliberation.

For account holders seeking to manage banking costs, existing protections can be maximized: opt for digital-only banks that waive maintenance fees, arrange salary or pension direct deposits to qualify for exemptions, and consult the Banco de Portugal's fee comparison portal for rate information. If improper charges are identified, file a formal complaint with the regulator—the €65M reimbursement record demonstrates that enforcement occurs when rules are violated.

Santos Pereira's statement was clear: the authority to cap fees exists, but it rests with parliament. How legislators respond will shape banking costs in Portugal going forward.