Letter of the day | Bilking banks must back off
No one should be surprised that the leaders of banks are balking at the idea of bank fees, but talk to the rank-and- file staff and they will tell you the banks are downright unreasonable.
Back in 2014, the Caribbean Leadership Re-Imagination Initiative contributed an article in The Gleaner titled 'Building bonds and sharing burdens'. In that article, we praised the insight, representative spirit, compassion and sense of duty to country of MP Fitz Jackson for taking up the matter of bank fees. That the goodly MP had not let that matter slip is exceedingly commendable.
But the banks continue to plough through the poor of this country with their 'rapacious' fees. Back in 2014, the two biggest banks were averaging a net income of J$1 billion per month. Fees accounted for approximately 40 per cent of that. In other words, the banks were making $400,000,000 in fees each month on the backs of customers, the majority of them poor people.
Fast-forward to 2017 and these big banks are now making nearly $1.2b in net income each month. So in the course of about two years, the banks have increased their income by upwards of 20%, while interest rates on savings have fallen to new lows. The banks, unlike the building societies, charge for almost every transaction, every activity, every disposable, even if you are to get a fax from another bank and use their paper. It's crazy!
The principle of regulation is basically twofold - to protect and promote the rights of consumers by ensuring minimum service standards and to prevent service providers from placing a disproportionate cost burden on the consuming public. So we have the OUR, for example, to which the utility companies must apply to seek rate increases. Regular public transport operators cannot increase fares at will. They have to await ministerial approval.
Banking services, in addition to being cartelised, are virtually inescapable. In that context, there needs to be greater regulation.
THE NEED FOR EQUITY
I truly hope that a regulatory authority will be established to regulate bank fees. The matter of bank fees is not only about service standards; it is also about equity. I agree with Peter Espeut, who has chronicled the morphing of the bank fees to cover every item and activity. I recall the days when the bank claimed that ATMs were intended to reduce costs. Now ATMs are a major income earner and the banks are at the same time laying off staff and pressuring them with unattainable targets.
At a time when the country is bracing for more direct taxes, the idea that the banks will be able to charge what they want is literally frightening. If we are going to create a fairer and just society, there must be greater equity in the sharing of the burdens.
If we are to build a society for all Jamaicans and create the path to prosperity for all Jamaicans, there has got to be a greater spirit of burden sharing. If taxi drivers cannot pass on their increased costs at will, neither should banks.
Dr Canute Thompson