money
Why getting an overdraft will soon be more difficult in France
Banks retain power to cancel and limit overdrafts
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Incoming banks rules will require French banks to scrutinise the finances of anyone applying for an overdraft, even if it is only for a small amount.
The changes will come into force for requests made from November 20, and come after France transposed an EU directive into national law.
Existing overdrafts, or those agreed before this deadline, are not affected.
Banks will also retain their control over overdrafts, including being able to cancel overdraft agreements, as long as they give holders 12 months to pay any outstanding amounts.
They will however have the opportunity to unilaterally lower limits, usually after a 30-days notice period.
What changes?
Current rules require banks in France to carry out solvency checks on account holders applying for overdrafts of €200 or more or those that rolled over and lasted more than a month.
For smaller requests however this is not required, and banks are free to set their own rules for offering these low-level overdrafts.
The new rules however require banks to carry out full solvency checks on anyone applying for an overdraft, regardless of the amount.
This includes income and expenses from the account, as well as other assets held. Banks may choose to reject the overdraft request based on their checks.
This will apply to new overdrafts opened as well as cases where clients wish to increase their overdraft limits.
In addition to stricter checks, banks will also need to inform clients with clear information about overdrafts, including fees for having one and taxes for dipping into the funds.
Nearly 40% of French account holders use overdraft
The rules have been met with criticism, including by the far-left La France Insoumise.
The party launched a petition against the changes, backed by leader Jean-Luc Mélenchon.
“More than 22% of French people are overdrawn by the 16th of the month. Today, these individuals survive thanks to authorised overdrafts,” said party MP Clémence Guetté.
The party also tabled a motion ‘establishing a right to overdrafts and eliminating abusive overdraft fees’, a potential indication of their banking policy for the 2027 presidential election.
Around 38% of people in France have an overdraft, said online credit group Cofidis in a 2025 report, with an average monthly balance of €411.
