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Costello’s deafening silence on bank fees.

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Joel Fitzgibbon MP

Shadow Assistant Treasurer Shadow Minister for Revenue Shadow Minister for Banking and Financial Services

20 May 2005

Costello’s deafening silence on bank fees

The 12 per cent increase in fees the major banks earned from households last year shows competition is still lacking in parts of the banking sector.

The RBA analysis reveals that consumers paid $780m in credit card fees last year. This is an increase of 30% in one year and 130% over the last 3 years!

The Treasurer should be concerned about the massive rise in credit card fees because these fees add to the burgeoning stock of household debt, now at record levels and rising.

But all we get from Costello is a deafening silence.

The RBA’s report clearly demonstrates that where the Reserve is prepared to become active, significant consumer gains can be made in credit card fees and charges. It also shows that increasing completion in the mortgage market has

benefited some borrowers.

Still, the banks have been able to increase fees in other areas to off-set losses in areas where regulation and competition has had an impact.

The Howard Government has been missing in action on these issues and until it is prepared to send a clear message that there are outstanding areas of concern then consumers will continue to lose out through higher fees and charges.

20 May 2005

Contact: Joel Fitzgibbon 0418 293 372 Brendan Long 0408 421 447