The Senate Economics Reference Committee released its report on Competition within the Australian banking sector yesterday.
The media has immediately focussed on one of the recommendations – that the Gillard government should “reconsider its decision to ban exit fees” on mortgages, “with a view to allowing enough time for the effectiveness of the existing ban on unfair and unconscionable exit fees …to be assessed”.
I’m much more interested in why both the Senate Committee, and the media, have ignored the far more obvious (and costly) example of banks gouging customers with “unfair and unconscionable” fees.
Their fees to access our own money.
Evidence from the RBA showed that the banks make far more profits from charging you to get at your own money, than they do from fees charged on credit cards. Personal loans. Even more than the profits from their fees on housing loans:
It gets worse.
The Committee also received evidence suggesting that bank fees hurt the poorest in our community the most. And, that these poorest customers are effectively subsidising wealthier customers:
The Senate Committee made 39 recommendations concerning the banking sector. Did any of their recommendations try to tackle the fact that banks make the most profits on their fees charged simply to get at our own money? Or, the fact that bank fees hurt the poorest in our community the most?
Only if you think the following recommendation would actually achieve anything:
Or, if you think that spending taxpayers money to set up special ATM’s in remote indigenous communities with low fees – rather than forcing banks to pull their greedy heads in – is a practical and just recommendation:
This Senate Committee report leaves what is clearly the most “unfair and unconscionable” example of bank gouging effectively untouched.
It is the bank(ster)s most profitable rort. Billions and billions and billions of little “transaction” and “service” fees.
The price of permission.
To get some of our own money.
Senators … for shame!
Twitter user Yagu4Pm comments –
@BarnabyisRight banks never put ATMs in to help customers. It was to reduce labor costs & make huge profits by charging usage fees.