Thursday, 29th of August.

Record profits for banks, rising fees for consumers.

Send a message now to express your concern over rising profits levels for banks in the face of rising fees and charges for consumers.

Dear…………..,

I am strongly opposed to the trend in the banking industry that neglects consumers and employees in its pursuit of profit maximisation for shareholders.
I am outraged by the ever higher fees and charges on bank accounts and home loans, branch closures and job cuts that are occurring in the context of unprecedented profit growth for banks and multimillion dollar remuneration packages for banking executives.
Banks have a social responsibility to the community that must be met.
Banking must be affordable and accessible for everyone in our community.
I call on the ACCC and the Federal government to take urgent action against arbitrary bank fees and charges.

Yours truly,

Send to:
Prof Alan Fels, Chairman of the Australian Competition and Consumer Commission
PO BOX 1199, Dickson, ACT 2602
Email: sydcompl@accc.gov.au
Tel: 02 6243 1129
Fax: 02 6243 1199

Mr Kevin Foley MHR, ALP Shadow Treasurer
Electorate Office: 34 Semaphore Rd, Semaphore SA 5019
Tel 08 8341 5200
Fax: 08 8242 1499
Email: ptadelaide@parliament.sa.gov.au

Mr Peter Costello MHR, Federal Treasurer
Room MG47, Parliament House CANBERRA ACT 2600
Tel: (02) 6277 7340
Fax: (02) 6273 3420
ministerial@treasury.gov.au.

Further information for your interest
Last week the Commonwealth Bank of Australia announced its record annual profit of 2.65 billion dollars, up 11 per cent from the previous year. At the same time it announced that 1000 jobs would be lost, on top of the 450 jobs cut in July. This is part of the Commonwealth Bank's 'new efficiency drive', but the trend is certainly not confined to the CBA.
In the year 2000 the total fee income for banks in Australia was 6.3 billion dollars. In the same year the four major banks made a net profit in excess of 8 billion dollars. This is a 336% increase in profits for banks since 1993.
While banks have been experiencing this record profit growth, consumers have not been basking in the benefits, rather they have experienced a massive growth in the cost of banking.
The proportion of total income for banks from fees is rising, and bank fees paid by households are growing at a faster rate than fees paid by business. The main area of growth is from fees paid on home loans, where banks set the condition that they can alter the level of fees and charges and add new fees and charges at their discretion without the consumers consent.
Along with this the cost of running a basic bank account is becoming more and more expensive for the average Australian, and almost completely unaffordable for disadvantaged sections of the community. There has been a growth in account keeping fees and transaction fees. The conditions built into these fees mean they are inherently more detrimental to low-income and fixed income earners. For example fees can be avoided if a minimum monthly balance is maintained, but the amount needed has been growing since 1995. Currently a minimum of $500 is needed. This has been part of a strategy in the banking industry to drive out low-income earners. This push from the industry has added to people's level of poverty.
Banks have also introduced higher fees and charges on over-the-counter transactions in order to encourage use of electronic banking and ATMs (which are cheaper for the banks to operate). Having a higher charge on over-the-counter transactions is a direct attack on sections of the community that cannot access ATMs, such as elderly and disabled people. Banks did in fact respond to the community outrage over this situation by offering exemptions on fees for particular customers. However, in a contemptible move, they included in fine print the criteria for what makes a person an 'eligible' pensioner or disabled customer. These criteria exclude many low-income people.
Affluent customers on the other hand are rewarded by having fees and charges waived if they have term deposits with the bank or if they are members of professional associations.
So while most shareholders and banking executives ride high on unprecedented profit growth, customers have been left behind with higher fees and charges and the loss of 55 000 jobs and over 2000 bank branches in the last ten years.
This is part of the broader deregulation in the banking industry. Banks have long since neglected their social responsibilities to communities, focussing instead on cost cutting and maximum profits for shareholders.
In an effort to reverse this trend, Now We The People will be campaigning in the long term for the return of a public bank, and in the interim for a legislated Social Charter of Responsibility for banks. This would be a legally binding requirement for banks to meet specific social obligations.
NWTP is organising a speaking tour that will begin in Melbourne this year to address the problems of the finance sector and to link this to another current issue, 'the war on terror', in order to place both of these issues in the broader context of corporate globalisation. Further details will be announced, also see visit our website for information www.nowwethepeople.org