Flatex was one of the first online brokers to charge its customers minus interest. The financial supervisory authority Bafin took action against it – but has now received a bitter defeat before the administrative court.
The popular online broker Flatexdegiro is still allowed to demand negative interest from its customers. This Tuesday, the Frankfurt Administrative Court lifted an injunction issued by the financial supervisory authority Bafin.
Flatex had informed its existing customers in March 2017 that the company was “forced” to charge negative interest of 0.4 percent. The company that makes its money online securities trading was one of the first to pass the negative interest rates of the European Central Bank (ECB) on to its customers regardless of the amount of the deposit.
The Bafin stepped in to protect consumers. However, the court denied the mandatory legal requirement for intervention and granted the Flatex lawsuit against the Bafin ruling. Several courts, including the Federal Court of Justice, had dealt with the collection of negative interest rates, so that intervention by the banking supervisory authority was no longer necessary, argued the chamber.
Commercial banks now have to pay 0.5 percent interest when they park excess funds with the ECB. In the past few weeks, several institutes have reduced the allowances for customers.
Flatex: “We don’t want to earn any money with it”
“This is not a mechanism with which we want to earn money, but basically a passing on of the negative interest rates of the ECB,” said a Flatexdegiro spokesman. »We would be happy to be able to abolish negative interest rates again. But they still exist today. ”
Flatex was founded in 1999, the company went public in 2009 and is now listed in the SDax small cap index. In 2020, the Frankfurt-based company took over its Dutch competitor Degiro. According to the company, Flatexdegiro had 1.6 million customers at the end of the first quarter of 2021.