“Banks are charging up to 775% profit on typical bank penalty fees.”

A call by six leading economists for the establishment of a people’s bank, has been welcomed by Family First Leader Senator Steve Fielding,  who says it works in well with Family First’s plan of reigning in the banks from exploiting everyday Australians.

“The Rudd government needs to get rid of the marshmallow attitude and get some steel and toughness into its approach to the banks.”

“Last month I introduced the Banking Amendment (Keeping Banks Accountable Bill) to stop the banks from taking advantage of their customers.”

Under the legislation the 4 major banks will need to satisfy the Treasurer that their decision to withhold an interest rate cut or to put up interest rates beyond the Reserve Bank’s official interest rate changes is not contrary to the public interest.

If the four major banks do not satisfy these criteria and they insist on moving their interest rates nonetheless, they will lose access to the government’s deposit guarantee scheme.

“Banks need to understand that government assistance comes with responsibility,” Senator Fielding said.

Currently banks have access to a government guarantee on all money deposited into their accounts enabling them to lower their borrowing costs and keep their profit margins stable. That same guarantee has helped the four major banks increase their market share of home loans from 80 per cent to 92 per cent.

“Similar regulations are already in place for health insurance companies, which are required to seek government approval for premium increases,” Senator Fielding said.

Last year Senator Fielding also introduced legislation to put a stop to the big banks outrageous penalty fees. “Banks are charging up to 775% profit on typical bank penalty fees,” Senator Fielding said.