Media release: 15 June 1999
SPOTLIGHT ON BANK FEES
Banks have increased cheque account fees dramatically over the last
eight years, according to a new survey released by the Reserve Bank today.
The figures come from a survey instigated primarily in response to demands
by a Parliamentary Committee and present some stark figures, according
to the Chairman of the Economics, Finance and Public Administration Committee,
David Hawker MP.
The Committee wanted to know whether lower interest rate margins had
been offset by banks increasing fees and charges.
Most noticeable from the Reserve Bank of Australia's survey of major
banks has been the increase in transaction fees over the last eight years.
Once in excess of the monthly fee transactions, the withdrawal fees for
ATMs (Automatic Teller Machines) have at least doubled: with EFTPOS the
increase is 60%, for cheques it is 50%, and for personal service in a
bank branch, withdrawing money has seen a staggering increase in costs
of 400%.
More recently, in 1998, the banks' fee income has grown rapidly in two
areas. Fees on housing loans jumped 56%, while for personal (household)
transactions the increase was a massive 80%.
The RBA goes on to point out when comparing falling interest rate margins
(that is the difference between the Bank's deposit and lending interest
rates) and increasing fees, households are generally better off. The same
is not so obvious for small business borrowers.
As the RBA states, on average bank customers have gained from increased
competition, particularly household borrowers.
However, depositors with low balances and an above average number of
transactions could be worse off. This means some of the most vulnerable
in the community could be the most disadvantaged with changing banking
charges.
Mr Hawker said he expected the whole question of bank fees would be
raised vigorously by members when the Reserve Bank Governor faces the
Parliamentary Committee at this Thursday's public hearing in Melbourne.
Ends
15 June 1999
Further information:
David Hawker MP (Chairman) 03 5572 1100 (electorate)
Beverley (Secretary) 02 6277 4582
Email: EFPA.Reps@aph.gov.au
Public Hearing Program: Reserve Bank of Australia
Date: Thursday 17 June 1999
Time: 10.00am to 1.00pm
Location:
Gardenview/ Parkview Rooms
Dallas Brooks Convention and Function Centre
300 Albert Street, East Melbourne
Witnesses:
Mr Ian Macfarlane, Governor
Dr Stephen Grenville, Deputy Governor
Mr Glenn Stevens, Assistant Governor
Note: Media access to the public hearing room will be available from
8.30am.
Committee Membership 39th Parliament
Chairman: Mr David Hawker MP
Deputy Chairman: Mr Gregory Wilton MP
Members:
Mr Anthony Albanese MP
Ms Anna Burke MP
Ms Teresa Gambaro MP
Mrs Kay Hull MP
Mr Mark Latham MP
Mr Christopher Pyne MP
Hon Alex Somlyay MP
Dr Andrew Southcott MP
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