New Banks Fees Bill in the Senate as Banks Profits Soar

Wednesday August 5, 2009

Deutsche Bank has recently released an industry analysis report that concluded that 87 cents in every dollar taken by the big banks in penalty bank fees is pure profit, a figure that angers many customers that the banks are trying to win over. According to the Reserve Bank of Australia, Australian banks recorded $960 million in penalty fees from household customer s and $200 million from business customers over the course of 2008. Within this figure, $490 million of household-paid bank fees went to overdraft, default and dishonour fees on transaction accounts.

The RBA figures were recorded as follows:

• Commonwealth Bank took $370 million
• Westpac at $300 million
• ANZ and NAB equal at $230 million

With the release of these figures, many banks are going into overdrive in an attempt to improve their customer relations and image with the NAB, Westpac and St George all cutting or reducing some of their account fees. Both banks, the Commonwealth and ANZ are predicted to follow suit with pressure to remain competitive in the banking industry.

Banks fees have become a hot topic over recent weeks, not only with the recent fees cuts by some of the major Australian banks but also for the new bill before the federal parliament.

Currently the senate economics legislation committee are open for submissions regarding the Trade Practices Amendment (Australian Consumer Law) Bill 2009. This is a draft law that intends to protect consumers from unfair contracts. It is expected that banks will opposed the new bill as it will give consumers the opportunity to have unfair contracts voided.

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