Martin Henry | Shame on Parliament for dumping Jackson Banking Bill
The Students' Loan Bureau has been threatening to publish name-them-and-shame-them advertisements of delinquent borrowers. MP Fitz Jackson's unnamed backers have gone ahead and published full-page advertisements of the faces of the parliamentarians who have voted to kill his private member's bill, the Banking Services (Amendment) Act, 2017. The ad is politically potent. The Government side of Parliament should be afraid. The issue of high and plenty bank fees has strong public engagement and is stirring up a good deal of public anger.
"On Tuesday, February 13, 2018," a day that could very well be called Black Tuesday, the ad blasts out to the public: "JLP members of Parliament, except for Lester Michael Henry, voted for you to continue paying high bank fees." That vote was a tight, tight 30-29 for killing the Jackson bill and was strictly along party lines.
The faces of the 'Kill Bill' JLP MPs are lined up in living colour in the ad. "These are the faces who don't want you to stop paying high bank fees and charges. Remember them when you pay high fees and charges. Remember these Jamaica Labour Party MPs who voted for the banks to continue taking your money." And, of course, remember them when you vote, the pro-Jackson ad didn't say but did say loudly and clearly in intent.
The banks took $29 billion in fees in 2016, $40 billion in 2017, and will extract more than $50 billion this year, the ad rolls out. And for every month they delay and vote against the Jackson-proposed amendments to the Banking Services Act, "it will cost you $4,500,000.00". The personal appeal is powerful. From a communications point of view, not to mention from a political point of view, the Jackson ad is potent.
My own analysis goes beyond the economic, which I will come back to. But two glaring economic facts stand out from the start: Jamaican banks have a very wide spread between their savings interest rate and their lending rates, one of the widest in the world and banks make their core income from this spread. Then, the banks are superprofitable, apparently operating with a can't-lose profitability formula that does not apply to most other businesses, the toll roads and JPS, with their government pricing agreements being notable exceptions.
From the news: "NCB Financial Group Limited, the parent company for National Commercial Bank, racked up just over $19 billion in net profit for the year ending September 2017 to set a new record for itself. The conglomerate's performance cements its number-one position as the most profitable bank and stock market company in Jamaica. Last year, the bank made $14 billion, which means that it grew those earnings by 32 per cent this year."
But I want to start with the shameful behaviour of our Parliament that is populated with the people's representatives.
In the first place, why in heaven's name would a vote on debating the Banking Services (Amendment) Act, 2017, be along party lines? It's a perfect issue for a free-conscience vote since the matter cuts across party interests and loyalties.
And which of the people's representatives on either side of the House of Representatives can go back to their constituency and tell the people out there, 'We don't think the issue of high and plenty bank fees is worthy of parliamentary debate'? Fitz Jackson's PNP is not free of the fault and the stupidity of enforcing the party whip to ridiculous extremes. The same knife that jook sheep ... .
Private member's bills, of which there are precious few, fare poorly in the Parliament, often falling off the order paper and never getting to debate. The Jackson bill was making progress, albeit slowly and in fits and starts.
Bills from the executive dominate the Parliament. But in principle, every member has the right to propose a bill. The Jamaican Parliament, if it is going to be faithful to democratic ideals, must make more space for private member's bills. For one thing, the Parliament needs to sit more often and for full-day sessions. We have a lax and lazy and late Parliament.
For another thing, the capacity of the parliamentary counsel to draft bills, from whatever source, must be greatly expanded and strengthened to serve the Parliament. We are trying to run a Parliament successfully on the cheap. The resources necessary for the effective operations of the Parliament must be assigned from public revenue as a matter of course.
When Parliament doesn't work as it should, members and their political parties may feel driven to alternative means: the media, the party meeting platform, the hotel, Vale Royal - the streets. So the Jackson ad. So the present parliamentary Opposition calling for a renewal of the Vale Royal Talks. Essentially off-the-record, non-binding private talks about the nation's business conducted outside of the Parliament between the two political parties, which are not even entities recognised by the Constitution.
The reason given for the government side of the house conspiring to vote down the Jackson bill could not be more lame and illegitimate. The argument was that many elements of the Banking Services (Amendment) Act, 2017, were already covered in other pieces of legislation, hence there was no need for the Jackson bill. But that is precisely what taking the bill through full debate would have resolved!
Minister of Finance Audley Shaw, in the legislature, had absolutely no authority and was out of order, in the technical sense of the term, to have made the comments he made about the Jackson bill. And there was none to set him straight. Not the Speaker. Not the leader of government business. Not the prime minister. Not even the Opposition! On matters of legislation, Shaw and Jackson are exactly equals, like all other members of the legislature.
According to Gleaner reporting the day after the Black Tuesday, February 13, vote against debating the Banking Services (Amendment) Act, 2017, Shaw urged Fitz Jackson, the opposition lawmaker who piloted the bill, to withdraw the measure and work with the Government in developing a framework to address the concerns he had raised. It is the Government, in this case, that should be working with the opposition lawmaker to resolve the matter of onerous bank fees.
Shaw told parliamentarians that 95 per cent of the provisions in the Banking Services Bill were included in the Bank of Jamaica's Code of Conduct for deposit-taking institutions.
"This is not a contentious issue, you know," Shaw declared, while indicating that he had identified 14 provisions in the bill that the previous administration included in the Banking Services Act, 2014.
The minister accused the parliamentary Opposition of playing politics with the bill. And the Government?
"I want to make it abundantly clear that we on this side, we, too, are concerned about certain fees and excessive charges in the banking system. The question is, how do you deal with it in a manner that is internationally acceptable and transparent?" Precisely what the Parliament, not the Cabinet, or indeed the ministry, is tasked to do.
Jackson countered that there was no harm in passing legislation that did not contradict any provision in existing law. And he pointed out: "This bill was drafted by the Government's chief parliamentary counsel to ensure that there is no contradiction in legislative provision," and would, therefore, have been technically sound as draft legislation.
Several pieces of recent legislation have done nothing more than integrate and expand existing legislation to deal with a particular matter. The Law Reform (Zones of Special Operations) Special Security and Community Development Measures) Act readily comes to mind.
Underscoring the pervasive hypocrisy of playing politics in the Parliament, Jackson quoted extensively from Hansard, detailing previous unequivocal support from government ministers Karl Samuda and Mr Shaw himself for the proposals to tackle the exorbitant bank fees.
And what is the Jackson bill seeking to achieve? As nothing but an amendment to the Banking Services Act, the bill is advocating a mandatory consumer code with a mandatory minimum service package. Savers are lending the banks their money, which the banks on-lend at handsome profit, and so a minimum service package without charge is perfectly reasonable and can be specified.
The banks are to provide customers notice of fee changes and service changes and afford access to information on accounts and transactions at a reasonable cost. The banks, the bill postulates, should keep the language of agreements with their customers simple and clear. This is already standard procedure in places like the UK, where, for years, Government has been mandating that business and state communication be done in plain English.
The Jackson bill wants, among other things, a mechanism for dealing with customer complaints and for agreements to be aligned to the Consumer Protection Act and with general principles of contract law and consumer protection law.
Economic arguments have come up about Government fixing prices. Counter-questions must be raised about banks cartelising and fixing prices, which the universality and closeness of fees as prices would suggest. And banks are not the only sector showing signs of cartelising. Why is the price of bread almost the same from one bakery and one shop to the next across the country?
Banks, while not a pure monopoly, occupy a position of dominance in critical financial services and in the lives of citizens. Other laws of the State have forced everyone into using the services of the banks or be excluded from the financial system. The Government must use the levers of law to ensure that banks do not gang up and rip off captive customers. The finance minister says that the Government and the Bank of Jamaica are moving to ensure this.
A fairer treatment of the Bank Services Bill would not only have been better for parliamentary democracy, but would have inspired greater confidence among people at loggerheads with their inescapable and rapacious banks.