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Tuesday, 5 November 1985
Page: 1583

Senator COLSTON(10.30) —On 9 October I raised the matter of home loan service fees which were being charged by the Commonwealth Savings Bank of Australia. My comments are recorded at pages 946 to 948 of the Senate Hansard. I was critical that this particular bank intended to introduce a loan service fee which was to be payable by those of its clients who were repaying a home loan. The ceiling on interest rates for housing loans is currently 13.5 per cent. The Commonwealth Bank is charging that maximum rate. The announcement of an additional loan service fee of from $30 to $90 a year for mortgages from $1,000 to $100,000 came as a most unpleasant surprise for many of my constituents. On 9 October I suggested that the loan service fee was nothing but a deliberate ploy to counter the 13.5 per cent ceiling set by the Government. In fact, I said:

. . . I would need great persuasion to be convinced that the bank which I mentioned is not like the tax evader, trying to find loopholes in the government directive that the ceiling be 13.5 per cent for housing loan bank interest rates.

Although my remarks were directed principally to the Commonwealth Bank, I did make reference as well to other banks which had introduced or were about to introduce similar loan service fees. I asked those banks to look to their own consciences to see whether they should continue to charge these fees. The Commonwealth Bank and the ANZ Bank have now decided not to persist with these fees. This decision became known today to those customers who had been affected.

Since I was critical in my remarks on 9 October, I should now congratulate both the Commonwealth and the ANZ banks upon reversing their earlier decision. I would also say that it is commendable for such large corporations to respond positively in a relatively short time. This indicates that these two banks are sensitive to the needs of their consumers. It is conceivable that my remarks in the Senate were part of the pressure that brought about these banks' changed attitude. Whether this is a fact or not is unimportant. By scrapping the loan service fee the banks have avoided a considerable amount of bitterness and ill feeling from many of my constituents. The additional charge, as small as it may have appeared to the banks, in reality would have meant another financial burden for many of my constituents to shoulder.