Australia’s big four banks may look at changes to credit card charges next as the Turnbull government keeps up the pressure on the scandal-plagued institutions.
Yesterday, the Commonwealth got the jump on its rivals in deciding to scrap the $2 fee charged to non-customers using the banks ATMs, announcing the news in full page ads in the Sunday papers. By the end of the day, its three main rivals, Westpac, ANZ and the NAB, had joined CBA in ditching the fees, which cost Australian consumers an estimated $500 million annually on 250 million transactions.
The move came just 48 hours after treasurer Scott Morrison revealed new draft laws on bank executive accountability announced in the budget.
Morrison has given the banks just a week to respond to the proposals – a deadline Australian Bankers’ Association chief executive Anna Bligh says is too short and unfair.
The laws will give prudential regulator, APRA, powers to seek fines of up to $210 million on banks that fail to meet accountability standards, as well as disqualifying executives guilty of misbehaviour and deferring their remuneration for up to four years.
Executives and board members paid more than $500,000 are targeted under the rules, which would see a CEO have either 60% of variable pay or 40% of total remuneration – whichever one is the lesser – deferred for a minimum of four years. For other “accountable” executives, the figures are 40% and 20% respectively.
APRA will be able to take the banks for court with large ADIs facing fines up up to $210 million, while medium ADIs face $52.5 million penalties and and small ADIs $10.5 million.
“Banks remain at the centre of some of the most critical decisions in life, including buying a first home, starting a business, and saving and investing for retirement. It is therefore important that mechanisms are in place to deter poor behaviour and provide for accountability where standards of behaviour are not met,” the treasurer said on Friday.
Scott Morrison, who claimed credit for the CBA’s decision to scrap the $2 ATM fee, said the government would also be watching the banks to make sure they don’t start shutting down ATMs in the wake of the announcement.
“I don’t know why they’d want to withdraw services to customers because I think their customers would respond appropriately to that,” he told ABC Radio National on Monday.
“There’s a whole range of costs that are thankfully and usefully coming out of the system now and this is another one. We’re taking action and it’s good to see the banks have too.”
Asked about credit card and late payment fees, Morrison hinted to ABC RN that more changes are coming.
“I think there’ll be some more news to come there. These are issues that are also being pursued through the House Committee on Economics… around those issues on credit cards,” he said.
“There are also some issues I’m continuing to work about where the fees go when you tap your contactless card at the supermarket.
“Which fees are you paying? You’re paying the credit card fee or the half per cent fee that comes out of your debit card. They’re issues we’re still very keenly focussed on.”
Morrison again ruled out any chance of a royal commission into the banks, saying the government was acting while Labor’s proposal would take three years before they would begin to act.
“Australians want us to do something now. Labor is being left behind on this,” he said.
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