Greens fight for banking transparency
(15 April 2010 – Australia) The Australian Greens Leader Bob Brown will introduce a bill at the next sitting of Parliament in an effort to rein in high bank fees and put an end to excessive profiteering by banks on mortgages.
The Australian Greens Leader, Senator Bob Brown, said the Delivering Essential Financial Services Bill, if adopted by the Rudd Government, would allow for 'basic' fee-free accounts, fair price mortgages and up-front disclosure of exit fees.
The proposed laws will put the power back in the hands of customers and be a welcomed force in keeping banks honest, Senator Brown added.
The Bill to be brought before parliament includes a ban on A$2 ATM fees and would ensure that all ATM costs, including 'foreign' transactions, reflect the actual cost of service delivery as determined by the review of costs by the Reserve Bank of Australia and ACCC, and approved by APRA.
Under the proposed legislation, banks would be obliged to provide all customers the option of a basic fee-free bank account for transactions such as deposit, withdrawal, transfer, access through ATM and EFTPOS, and access to a basic credit card.
The free accounts would be required under the bill to have real time warning of penalty fees and the ability to refuse the transaction. Consumers would also not be charged penalty fees for unavoidable actions, such as inward cheque dishonour.
Banks would be required to provide a mortgage that fixes the gap between what banks pay for their money and the interest rate they charge mortgage holders.
This is currently offered by UK banks and the Green’s claim that this type of mortgage would end price gouging by banks because it removes their ability to change interest rates independently of changes in the cost of borrowing. Banks would also be required to supply up front exit fees that are reasonable and should provide comparison rates for consumers.
The proposed laws will put the power back in the hands of customers and be a welcomed force in keeping banks honest, Senator Brown added.
The Bill to be brought before parliament includes a ban on A$2 ATM fees and would ensure that all ATM costs, including 'foreign' transactions, reflect the actual cost of service delivery as determined by the review of costs by the Reserve Bank of Australia and ACCC, and approved by APRA.
Under the proposed legislation, banks would be obliged to provide all customers the option of a basic fee-free bank account for transactions such as deposit, withdrawal, transfer, access through ATM and EFTPOS, and access to a basic credit card.
The free accounts would be required under the bill to have real time warning of penalty fees and the ability to refuse the transaction. Consumers would also not be charged penalty fees for unavoidable actions, such as inward cheque dishonour.
Banks would be required to provide a mortgage that fixes the gap between what banks pay for their money and the interest rate they charge mortgage holders.
This is currently offered by UK banks and the Green’s claim that this type of mortgage would end price gouging by banks because it removes their ability to change interest rates independently of changes in the cost of borrowing. Banks would also be required to supply up front exit fees that are reasonable and should provide comparison rates for consumers.
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