Senator on bank fees:Have a heart
Gail Alexander-Waller
Published:
Sunday, February 12, 2017
FLASHBACK
GAIL ALEXANDER
The Finance Ministry is currently studying whether the law should be changed to allow the Central Bank to regulate all fees charged by commercial banks.
This was confirmed yesterday by Finance Minister Colm Imbert.
He spoke in response to Sunday Guardian queries following RBC Royal Bank's recent decision to increase fees and charges on services across the board for general and business clients.
The bank's announcement did not go down well with customers, with some threatening to shift business.
Yesterday, the bank's senior manager, corporate communications, Nicole Duke-Westfield explained that while most charges pertain to people coming in to do business at branches, RBC's ATM withdrawals and deposits remain free of charge.
Deposits and withdrawals on all age-based accounts for seniors and youths are also free.
On Friday, Imbert was asked about statements he had made during the 2017 budget debate about looking into high bank fees.
At the time, Imbert was responding to concerns about bank fees raised by independent senators Dr Dhanayshar Mahabir and David Small.
Asked about rising bank fees and whether he had talked to banks and how citizens, amid the negative economic climate would cope with added financial squeeze, Imbert replied via email:
"The Central Bank Act gives the Central Bank the power to fix the fees and charges to be charged on loans, advances or other credit facilities, by a financial institution.
"Note that these are just fees related to loans. The law does not speak to fees and charges on withdrawals, overdraft, credit and debit card fees, ATM fees, monthly fees on accounts etc.
"These other fees and charges are not regulated by law at this time and in other countries these fees are subject to fair trading and unfair contract terms legislation and disclosure provisions.
"This is what I spoke about in the Senate-ie, whether we should change the law to allow the Central Bank to regulate all fees charged by commercial banks. It is a matter that is being carefully studied at this time."
What Imbert said
In the 2017 budget debate, after independent senators complained about high bank charges and fees, Imbert had said the Government was in discussions with the banks.
He had added then, "But you know when people have become accustomed to a certain way of doing things, when you try to get them to come out of their comfort zone, it's not so easy.
"So we're having dialogue with the banks first about interest rates, about bank charges and so on and if dialogue doesn't work, then we'll see if we need to legislate. But we're starting with discussion first."
Imbert added, "We've had at least three meetings with them already, the Central Bank is speaking to them about interest rates and charges."
He had also said Government would have sought to persuade banks to allocate a certain amount of foreign exchange for people with medical, tuition, and travel expenses.
In April 2016, Imbert also promised to examine the issue of deposit and saving rates charged by banks, following concerns by Independent Senator David Small.
Imbert said then he had authority to act on the issue by law. He said no previous finance minister ever examined the fact that Central Bank and the finance minister can regulate the spread between deposit rates and lending rates, and the fees and charges charged.
Imbert said he had asked Central Bank to initiate discussions with banks on this.
Have a heart!-Small
Yesterday, Small called for the regulator of banks-Central Bank-to urgently examine the fee issue.
"The regulator isn't providing for citizens' interest as banks seem to be able to issue any type of fees without consultation. I'm not against anyone in business trying to make a profit. But I'd want Central Bank calling in banks, so we citizens can be comforted some action is being taken to protect us.
"There must be a threshold beyond which the regulator can say a fee is too exorbitant."
Small said in the event there might have been private talks between regulator and banks, "This (recent fee hike) is an opportune time for an update on what discussions the minister might have had with banks (as he promised).
"Government was cognisant that Uber's operations could be illegal and potentially put people at risk, and acted quickly. Now, many people on the breadline trying to save are being subjected to higher fees. In these hard economic times...have a heart! Please examine it."
Opposition MP Dr Suruj Rambachan, who had also warned in the 2017 budget debate about bank rates, said he was writing Canadian Prime Minister Justin Trudeau on RBC's move.
"It isn't consistent with Canadian human resource practices and culture. RBC seems to be streamlining products to exclude certain poorer classes and do business with elites.
"Government can't do anything about this. It's customers' decisions to withhold support or not.
"People should use credit unions which Government should strengthen, as well Unit Trust plans and FCB."
There have been calls for banks to receive deeper scrutiny not only from finance, but the wider Parliament.
More options offered-RBC
RBC's Duke-Westfield said the bank was offering more channels for banking.
"We've instituted an e-statements option where clients can access statements online for free as well as online, mobile, ATMs and in-branch services. Clients don't always have to come in. There are alternatives."
She said RBC's cyber framework was geared to handle the situation including curbing ATM fraud.
Duke-Westfield said RBC's recent adjustments to some products and services "reflect the increasing cost of doing business in the market but we work hard to ensure changes are aligned to economic and competitive realities in the market".
Yesterday, Republic Bank CEO Nigel Baptiste said Republic "wasn't considering any increase in fees at this time".
There was no response from Scotiabank and FCB heads.
May 2015- Small said, "...The public is being mugged by the banks, insurance companies, supermarkets and dispensers of public services."
January 2016-Opposition Senator Wayne Sturge called for Government to tax every charge banks place on customers. He said four to five banks post billions of dollars in after-tax profits and banks charge customers for every transaction, "...and you ain't touch them yet. But yuh touching the poor".
April 2016 -Small said Government could assist the public's belt-tightening and saving efforts by asking banks to rectify certain issues. Noting Central Bank's economic bulletin stated the gap between deposit and savings rates is about eight per cent, Small added: "Tell banks: this spread, eight per cent, is too high. You're robbing people."
October 2016-Mahabir said banks weren't for poor people since some charge $25 monthly for savings accounts less than $50,000. He deemed fees "onerous and exploitative".
October 2016-Independent Senator David Small said the "banditry continues" with banking charges since the space between deposit and interest rates is atrocious. I feel every bank has a group of people whose job it is to work out how to get fees from people-real schemers!"
October 2016-Rambachan warned bank rates would increase due to 2017 budget stipulation of the 30 per cent tax on people earning $1m annually. He claimed banks may attempt to recover losses from this.
RBC PERSONAL BANKING FEES AND SERVICE CHARGES
RBC Accounts Cost
RBC Leo Young Savers-All Deposits and Withdrawals and Point of Sale-FREE
RBC Student Banking-In-Branch transactions-$8.00
RBC Student Banking-ATM and Online Deposits and Withdrawals, and Point of Sale-FREE
RBC Sixty Plus-In-branch transactions and ATM-FREE
RBC VIP Banking-In-Branch transactions, Standing Orders, Point of Sale, ATM Transactions-FREE
RBC No-Limit Banking-In-Branch, Standing Orders, Point of Sale, ATM Transactions-FREE
RBC Day to Day Banking-In-Branch transactions-$8.00
RBC Day to Day Banking-ATM deposits and withdrawals, Mobile and Online Banking transactions-FREE
All RBC Online Statements (E-Statements)-FREE
RBC Debit Card transactions at RBC ATMs-FREE
RBC Mobile Banking-FREE
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