Mr. Underwood
Please don't take their "oh so generous offer". Especially, since, if I understood correctly, already got a "rejection letter" from Targobank. And I really don't think you'd be "making a point" just for yourself here. You're rather standing up for the law - and every other customer that they are and will be trying to fob off (even if, in the case of IBAN discrimination, it's just a relatively unimportant part of daily life).
Once you have a "rejection" black on white, you don't even have to fight it further with the bank. Just forward your correspondence to BaFin as supervising authority (who are a German authority that does speak and accept inquiries/complaints in English).
As I've previously said, the European Economic should really NOT only be to the benefit of big multinational companies and banks who "just think they can do what they want" when it does NOT suit them. (As an American, would you accept a Merchant rejecting your credit card or bank account just for being out of state?)
