Is the $2 ATM fee necessary?
There may good news in store for those people who are in the habit of withdrawing from ATMs. The Federal Parliament just announced that it will legislate on eradicating the $2 ATM fees. It is estimated that these ATM fees cost Australians a whopping $600 million a year. This is the initiative of Greens senator Bob Brown, who aims to stop the exploitation in the name of profits exercised by banks especially on mortgage fees. Total bank fees are estimated to be around $5 billion a year.
Through the Green’s Banking that serves the Community Bill proposes that basic accounts be free of fees, mortgages should have fair pricing, and clear disclosure or explanation on mortgages’ exit fees. Senator Nick Xenophon as well as the Family First Party are in full support of Senator Brown.
The proposal enables customers to be in control once more and pressures the banks to be more honest. This is the legislatures answer to the ebbing respect of the general populace with regards to the banking system. The bill is the Greens’ challenge to the Rudd government as well as a response to the ever increasing gap between the wealth and the poor. The present government is supposedly pro-Labor, which should be more active in setting up measures and implementing them so that the general masses can truly benefit.
The $2 ATM fees on every withdrawal is “foreign” and not a sound banking practice as seen by many Australians. Obviously, it has not received good reviews from the public. Consumers are actually reducing their ATM use according to the information supplied by the Reserve Bank. However, a substantial 25 million cash withdrawals have been made in foreign ATMs in February, which literally means $50 million in ATM fees.
Moreover, the Bill also contains a stipulation requiring banks to justify or explain the exit fees on mortgages are based on fair pricing instead of a means to stop the consumers to switch to another lender. The Greens aim to pattern Australian banks to the standard set in the United Kingdom, which clearly requires the banks to show that the mortgage shows the difference between the rate they give out for money and the charges they impose on borrowers.
In fact, the National Australia Bank has acknowledged that most of the bank fees are not really necessary and they have removed fees for overdrafts, cash handling and even on bouncing checks. NAB has chosen to forgo the $40 million a year they could earn just in fees alone.
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