By: Sugar Ray Thomas
Member of parliament for St Catherine South, Fitz Jackson has described some banking fees being charged by the banks on depositors as wrong, immoral, irrational, unjustified and in some cases illegal.
Jackson was addressing the 62nd St Ann Chamber of Commerce Awards luncheon where he defended his move to bring forth new legislation to regulate the fees on services charged for by banks.
He explained to the audience that banking is uniquely different from all other businesses and it cannot go on without depositors.
“Everybody has always known the bank for the safe keeping of your money… What the banks have done over the years is to unilaterally redefine banking and say if you take the money to me, I am going to charge you a fee. If you take the money to me, I am going to impose a penalty. That penalty is what they call a fee. So you are providing a base for them to make money, but they penalize you,” Jackson stated.
He argued that “the deduction of hard earn money” from depositors was a “breach of trust.”
“Under the Banking Act, we as a state say to the people that these institutions, who we issue a license to, are being supervised and they are trustworthy people and so your money must be safe; safer than putting it under your mattress. And what the banks have done is that in order to increase their bottom line, in shifting away the focus from taking money, lending it and making it for themselves, they say you go earn your money and all of what you earn I want a little from it,” he said.
Jackson said that what the Banking Services Amendment Act tabled seeks to realign is that for deposit taking institutions, there is a minimum level of services that they must provide for the money that they take from persons.
Some banks have charged fees for withdrawal of money from accounts, making checks on money in your accounts, among others.
Jackson argued that once the money of persons are in the bank, it benefits the banks.
“Your money in the bank is what you are being asked to pay a penalty for and that is wrong, immoral, irrational, unjustified and in some cases illegal.”
Jackson brought into focus some of the provisions of the Banking Services Amendment Act that is before the Parliament. One such is that each account holder should have a minimum of 120 transactions or 10 transactions per month, without being asked to pay a fee.
Another provision of the minimum services package is that any information being sought must satisfy statutory requirement and also for seeking information on your accounts, the Bill prohibits a charge to access this information.
In terms of minimum balance, below which a fee is charged, Jackson stressed that a provision of the Bill says that the banks “cannot change the terms of an account without the knowledge of the account holder.”
Jackson also touched on the issue of dormant accounts, which he said had been treated by some banks in a “downright disgraceful” way.
Several banks over the years have been charging fees on dormant accounts. Since the issue of banks charging several fees on various services has been raised by Jackson, supported by members of the public, some banks have taken the decision to suspend charging fees on dormant accounts.
In making his point about what he called the disgraceful nature of the dormant accounts, Jackson highlighted the story that a member of his constituency told him about one of his relatives in Manchester. The man had a cow that he was rearing. It was in the event that his mother died, he would use the proceeds for her funeral. Cow thieves became prevalent and the man had to resort to selling the cow out of fear of it being stolen and he placed the money in the bank.
Some years after, he had a calf and he decided to sell the calf as well and he decided to also place the money in the account. However, when he went to the bank, he became aware that most of the money that he had in the account from the initial sale of the cow, was gone due to dormancy fees.
“So him running from the cow thief and run into the banks… So the bank in that practice has become the equivalent to the cow thief,” Jackson posited.
From the scenario, he raised the point that: “We cannot build a credible country where trust by individuals and institutions cannot be expected. We are going nowhere fast… We do not have the moral authority to criticize scammers or any of the other petty thieves… if we institutionalize practices like these and consider them as okay and it is just business practices.”
Jackson stressed that every licenced institution has the duty of protecting the funds of a depositor and the practice of the banks through dormancy fess where they “periodically and systematically” deduct fees does not make for safe keeping of citizen’s money. It was against this background that Jackson said that he has taken the step of filing a class action suit.
Jackson sad that from the suit he would be seeking a declaratory judgment from the courts to say that such action (of the banks with regards to dormancy fees) constitutes a breach of the existing Banking Services Act.
In addition, he is also seeking a recovery of those funds, because the deductions would have been made illegally and in breach of the law.
