Bankers' Association calls for temperance over fees
The Caribbean Association of Banks (CAB) is warning against any attempt by the Jamaican Government to legislate fees, suggesting that market forces should continue to determine fair prices for services delivered by regional banks.
In a release issued yesterday, the CAB said "banks charge fees to recover the costs associated with various products and services and it would be risky to legislate limits or cap these fees in any way. All banks have the right to cover cost and make a return for its shareholders."
The CAB said, "Limiting the fees would make the regulation or regulator jointly responsible for any losses resulting from the bank not being able to cover its cost in the normal course of business."
The organisation is instead advocating measures promoting full disclosure by local banks, which practice, it says, will allow consumers to make more informed choices in relation to banking fees.
"Any regulation which requires full disclosure is likely to be more beneficial than legislating fees in any way as the public would then be aware and able to make an informed choice."
The St Lucia-based CAB was responding to ongoing public discussions around banking fees in Jamaica.
A recently released Bank of Jamaica survey of fees and charges indicated that there was a 30.8 per cent increase in fees charged since 2010 by local banks. In some instances, individual charges had risen by up to 100 per cent.
The Bankers' Association of Jamaica also issued a statement on Monday, calling for the public to await the findings of the Select Committee of the House of Representatives on Economy and Production, which is to examine the fees.
The CAB notes that "the issue of banking fees is not unique to Jamaica or any one country in the region. In fact, the ECCB (Eastern Caribbean Central Bank) also has a code of banking practice which, among other things, speaks to the proper disclosure of banking fees even though the code is not legally binding".
The Caribbean body concludes that allowing market forces to influence what fees are charged and the level of increase "is the best regulator in relation to banks that may wish to charge excessive fees".
It suggests that its members provide fee information to the public on their website, brochures, and in banking halls.