New EU Banking Law: What It Means for Foreigners in Germany

Introduction

If you live in Germany and hold a bank account with a UK, US, or other non-EU financial institution, you may have recently received an email or letter informing you of changes to your account. Behind that message is a new EU banking directive that reshapes how non-EU banks can serve customers who are resident inside the European Union. For the expat community in Germany — many of whom keep accounts abroad for salary payments, savings, or international transfers — this regulation has very practical consequences. This guide explains what the directive does, who it affects, and what concrete steps you may need to take to protect your financial situation.

What the EU Directive Actually Says

The EU has tightened the rules around how banks and financial institutions that are based outside the bloc can provide services to people living inside it. Under the new framework, non-EU banks that want to serve EU-resident customers are required to meet stricter conditions — including, in some cases, establishing a local EU entity or obtaining specific authorisations. Banks that do not comply may be restricted from offering their services to EU residents, or may choose to close accounts held by customers with an EU address.

The directive is part of a broader push by the EU to strengthen financial market oversight and consumer protection across member states. While the regulation is not specifically aimed at individual customers, its knock-on effects are very real for anyone living in Germany who relies on a foreign bank account.

Who Is Affected in Germany

The regulation is most relevant for expats and immigrants who arrived in Germany from outside the EU and maintained their home-country bank accounts — a common and practical arrangement. This includes:

• UK nationals who kept their British bank accounts after Brexit and after relocating to Germany
• US nationals and other non-EU citizens who use American, Canadian, or other international banks for salary receipt or savings
• Internationally mobile professionals who use global fintech platforms or challenger banks registered outside the EU

If your bank is based inside the EU — including German banks and EU-based fintechs such as N26 or Bunq — you are not affected by this change.

What Banks Are Doing in Response

Some non-EU financial institutions have already begun contacting their EU-resident customers. The messages range from simple information notices to warnings that accounts may be restricted or closed if the customer cannot update their registered address to a non-EU country. In some cases, banks are giving customers a deadline to either change their address on file or close the account themselves before the bank takes action.

The response varies widely depending on the bank. Some institutions have obtained the necessary EU authorisations and plan to continue serving EU-resident customers without interruption. Others — particularly smaller or more regionally focused banks — have decided it is not worth the compliance cost and are exiting the EU-resident market entirely.

Practical Steps to Protect Your Finances

If you have received a notice from a non-EU bank, or if you are unsure about the status of your foreign account, here is what you should do:

1. Read the notice carefully. Check whether your bank is restricting services, closing your account, or simply informing you of a policy change with no immediate action required.
2. Check the deadline. If your bank has set a date by which you must act, mark it in your calendar and do not wait until the last day.
3. Open a German or EU-based account if you do not already have one. All residents of Germany are legally entitled to a basic bank account (Basiskonto) at any German bank, regardless of nationality or residence status. This can serve as your primary account while you sort out your foreign banking arrangements.
4. Update your payment and direct debit details. If you use your foreign account for salary payments, subscriptions, or standing orders, make sure to update those details before the account is restricted.
5. Consult a financial adviser or your bank directly if you are unsure about how the directive applies to your specific situation. Rules can differ depending on the type of account and the country where the bank is registered.

Frequently Asked Questions

Will my foreign bank account be automatically closed?

Not necessarily. Whether your account is closed depends entirely on your specific bank and how it has chosen to respond to the directive. Some banks have secured EU authorisation and will continue operating normally. Others are proactively closing accounts held by EU-resident customers. The key step is to read any correspondence from your bank and act before any stated deadline.

I have a UK bank account from before Brexit — am I especially at risk?

Yes, UK-based accounts are among the most commonly affected, since UK banks lost automatic EU market access after Brexit. Many UK banks have already restricted services for EU-resident customers in recent years, and this directive adds another layer of compliance pressure. If you have a UK account and live in Germany, it is worth contacting your bank directly to ask about their current policy for EU-resident account holders.

Can I open a German bank account easily as a foreigner?

Yes. Under EU law, every person legally resident in the EU has the right to a basic payment account (Basiskonto). German banks are required to offer this account to all legal residents, including those with limited residence permits. You will typically need your passport and your Anmeldung (proof of registered address in Germany) to open an account.

Conclusion and Next Steps

The new EU banking directive is a regulatory change with real-world consequences for expats in Germany who rely on non-EU bank accounts. The most important thing you can do right now is check your email and postal correspondence from any foreign banks you use, understand whether your account is affected, and — if you do not already have one — open a German or EU-based bank account as a backup. Financial security is a cornerstone of stable life in Germany, and acting early will save you from unnecessary stress down the line.

Source: The Local Germany