Media Release
Thursday 21st October 2010
Interest rate limits welcome, but more reforms are needed for
Australian banks
The Finance Sector Union (FSU) today welcomed the Coalition’s foray into the better
banking debate. The FSU has long been urging greater parliamentary regulation and
monitoring of bank practices to make good their social obligations.
The FSU said that the Coalition’s call for a tougher response from Government towards
the banks over interest rates was a positive step that would be welcomed by the
Australian public. Independent research commissioned by the FSU in April 2010 showed
that 79% of Australians want the parliament to prevent banks charging higher interest
rates than those set by the RBA.
Leon Carter, National Secretary of the Finance Sector Union, said Australian banks had
an obligation to responsible lending practices and to ensure that interest rates and
charges are kept at a sustainable level.
“It seems that the days are gone when we knew precisely what an RBA interest rate hike
of .25% would mean to our monthly mortgage payments. Now we have to sit back and
wait to see how much more the banks decide to gouge from our pockets. The public has
had enough and they want parliament to regulate to protect them from this behaviour.
Mr Carter also sent a message to our politicians that they must not stop there. “We’ve
got high levels of debt in this country, stoked by our banks who are reaping in record
profits. Yet the banks continue to cry poor to justify further profit-seeking activities.
Unless the parliament is prepared to review all of the behaviours and practices by banks,
any reform to the charging of interest rates will simply be offset by alternative profit
gouging methods.”
“Interest rate charges are the tip of the iceberg when it comes to the publics disquiet with
our banks” Mr Carter said. “On the back of our research, we have established a reform
agenda called Better Banking. It reflects the views of the Australian public and the
thousands of Australians who work in the sector, our members.
Our Better Banking Charter urges reform in the following areas:
-
Investing in Australian jobs and skills and ceasing the practice of offshoring jobs
-
Removing conflicted remuneration models based on sales volumes of debt
products
-
Ensuring fees and charges reflect cost and service provisions
-
Limiting interest rate rises to official interest rate movements
-
Ending short term decision making by prohibiting Executive bonus cultures
“We would urge all political parties to consider the role and responsibility that
Government’s have to ensure that the essential service of banking is fairer for all
Australians.
Ends
Spokesperson:
Leon Carter, National Secretary, 0409 946 597
Media:
Leanne Shingles, 0423 821 773
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