Banking and Financial Newsletter – September 2025

| Banque Finance |

1. Banking services

– FR I Regulations I Ordinance of September 1, 2025, on the list of information and documents that payment or electronic money institutions must collect in order to participate in a payment system

This ordinance clarifies points 1° (measures to protect the funds of payment service users), 2° (governance arrangements and internal control mechanisms put in place by the payment institution) and 3° (liquidation plan in the event of the payment institution’s failure) of Article L330-5 of the French Monetary and Financial Code. This ordinance also applies to electronic money institutions.

Payment institutions must have information enabling them to demonstrate that they have implemented measures to ensure the protection, stability, and integrity of payment systems, in accordance with the above-mentioned article.

The ordinance also provides details on the nature of the governance arrangements, internal control mechanisms, and provisions relating to the use of information and communication technologies that payment institutions must have in place.

Finally, the ordinance specifies that the payment institution’s liquidation plan must be tailored to the company (depending on its size and economic activity) and must contain a description of the measures put in place to ensure the execution of pending transactions and the termination of existing contracts.

– FR I Regulations I Order No. 2025-880 of September 3, 2025 on the modernization of consumer credit

This order transposes the European directive on the modernization of consumer credit.

It extends the scope of consumer protection regulations to free credit, mini-loans, loans of less than three months with negligible costs, consumer credit between €75,000 and €100,000, and lease agreements with purchase options.

– EU I Case law I Court of Justice of the European Union (Case C-665/23 I Veracash) I August 1, 2025 I No reimbursement for an unauthorized payment transaction in the event of late reporting, and intentional or grossly negligent behavior

In this judgment, the Court clarifies the rules governing the payer’s liability in the event of an unauthorized payment and emphasizes the exceptional nature of these rules, the criteria for which must be strictly assessed. Under this regime, the payer will be liable for unauthorized payment transactions that they have not notified within a reasonable time (even if they have reported them within the legal time limit of 13 months) and intentionally, or as a result of gross negligence consisting of a clear breach of a duty of care.

– EU I Regulation I Strengthening the security of SEPA payments : “Verification of Payee” will be mandatory from October 9, 2025

From October 9, 2025, all banks in the SEPA zone will have to make a new security feature for euro transfers available to their customers : Verification of Payee (VoP).

This mechanism will make it possible, as soon as a payment is initiated, to verify that the IBAN entered matches the beneficiary’s identifier (name for individuals, or identification code for businesses). It will apply to both standard SEPA transfers (SCT) and instant transfers (SCT Inst).

– FR I Case law I June 12, 2025 I Increased duty of care for banks, even towards their business customers

In a ruling dated June 12, 2025 (No. 321 F-B, appeal No. 24-13.777), the French Supreme Court confirmed and reinforced its case law on bank fraud through spoofing.

For the first time, it explicitly recognizes that victim protection also extends to professional clients, imposing an increased duty of care on banking institutions. From now on, the bank’s liability can only be ruled out if it can demonstrate gross negligence, even when the fraud targets a company.

2. Banking supervision

– FBE I Report I 18 July 2025 I Proposals for a simplified European regulatory framework

On 18 July 2025, the European Banking Federation (FBE) published a report proposing targeted reforms to reduce complexity and make the prudential, supervisory and resolution regulatory framework more efficient in order to support European banks in a context of declining European competitiveness compared to other major foreign jurisdictions.

According to the EBF, this simplification should take the form of the following measures:

1.Streamlining of the European legislative process.

2.Simplification of the prudential, supervisory and resolution framework.

3.Simplification of the framework relating to technological developments.

4.Reduction of excessive reporting obligations and suitability requirements and introduction of a more flexible categorization system.

5.Review of the ESG framework in the financial sector.

6.Simplifying the regulatory framework for AML and rethinking taxation related to financial services.

7.Establishing a data hub to streamline the reporting framework in order to reduce the administrative burden on banks and related costs.

– FR I ACPR I Report on the prevention of rebound accounts for money laundering from scams and other fraud.

The ACPR’s AML-CFT department conducted a study over the period 2022-2023 on the use of French accounts as intermediary accounts for the purpose of laundering money from fraud or scams.

As a reminder, an account is considered a rebound account when it is used as an intermediary account before funds are transferred to a foreign account. This laundering mechanism therefore conceals the actual destination of the funds and makes them more difficult to recover.

In summary, the points of attention for financial institutions that are particularly exposed are:

1.Establishing a relationship, identity verification and customer knowledge;

2.Enrich the customer knowledge process of the risk management system;

3. Implement automated systems:

3.1 A tool for detecting inconsistencies between information;

3.2 An automated tool for quickly suspending transactions identified as risky;

3.3 Set limits on the amount of transactions that can be executed by a customer without the intervention of a member of staff.