Fitz Jackson, the Member of Parliament for St Catherine Southern, recently made an impassioned speech in the people’s parliament concerning what has increasingly become the vexatious question of the inordinate fees that banks in Jamaica charge their customers. He has been a leading voice in the critique of these fees. This is refreshing, for it demonstrates independence of thinking — and to some extent courage in taking on the powerful banking sector.

Unsurprisingly, the speech has not found favour with the banks nor with officials of the Private Sector Organisation of Jamaica. Dennis Chung, its executive director, believes that regulating bank fees is a step in the wrong direction and one that is not consistent with what happens in a free and open economy. He believes that such regulations may cause loss of jobs and other difficulties in the economy. His chairman, Paul Scott, was not far behind in his lamentations against Jackson’s proposals.

Without going into the details, some of the regulations proposed by Jackson are not unreasonable. For example, it is not unreasonable to ask banks to have a certain level of communication with their customers before exacting fees on their accounts. The way dormant accounts are emptied of their deposits before giving customers a reasonable chance to clear these deposits leaves a lot to be desired and needs to be tidied up.

The fact is that a number of the things mentioned in the speech are things that no external body should require of a banking institution that was willing to police itself and be fair to its customers. A culture of fairness would dictate restraint, but the value of the customer becomes secondary to enhancing the bottom line and securing shareholders’ value.

The howls from the banking sector, mainly through its bankers’ association, are understandable because banks do not like to be regulated. And this is not just a problem in Jamaica: It is something that is emblematic of the banking culture, one can safely say, throughout the world.

For example, it is the constant cry of the banking community in the United States that they are over-regulated. One of President Donald Trump’s platform issues which endeared him to many in the business community was the promise to remove onerous regulations contained in the Dodd-Frank financial reform act which was passed by the Barack Obama Administration in the wake of the collapse of the financial sector in 2009. In many instances these regulations have worked well to constrain the rapacious attitudes of banks, especially the bigger ones which appear to be driven by a psychology that they can do as they please. They are undeterred by any suggestion that wholesale removal of these regulations may have a deleterious effect on the US economy and may place the country and the world in a crisis not unlike that in 2009. Yet, the Trump Administration seems willing and eager to roll back some if not all of these regulations. The biggest banks in America are salivating at the prospect of such rollbacks. This has been bolstered by the influence of Goldman Sachs executives on the Trump Administration and Trump’s general incurious approach to policies of any description. One should not be surprised if the “big boys” have their way.

We should not forget in Jamaica that it was not until the collapse of the financial sector in the 1990s that some of the present-day regulations of banks were put in place. “Fit and proper” criteria up to the point of the collapse for operatives in the financial industry were more or less accepted as cultural, but the Government was forced to enshrine such requirements in law. It was clear that left to themselves not much would have changed. One does not recall any vociferous objections to these regulations, except for the fact that they believe they are too heavily taxed. It is in the area of fees that they seem to resent any government intrusion of any kind.

But people are not in a mood to be sympathetic to them. Banks are just one of those institutions that have a love/hate relationship with the public. They are viewed, rightly or wrongly, as rapacious capitalists only bent on taking poor people’s money. This is why when they howl against regulation of fees it comes across to the average Jamaican as hollow and not much different from a wolf baying at the moon. For too long they have charged their customers inordinate fees while paying paltry returns on deposits and enjoying large spreads on their loans to customers. They have placed greater burdens on their poorer customers, many of whom out of loyalty remain with them. Some, not as sophisticated as others, have had their accounts bleached of their paltry savings. By so doing the banks have placed themselves in the invidious position of being perceived as greedy and unjust by an unforgiving public.

This is exacerbated by reports of mega-profits being made by banks over the last 10 years. Last year alone the two largest banks — National Commercial Bank and the Bank of Nova Scotia — between them made net profit of $26 billion. Despite this, banks are yet to be robust in their lending to the productive sectors of the economy. Small businesses complain that they cannot get well-needed capital to develop their businesses, while banks will readily lend money for motor vehicles and other personal endeavours which hardly add anything to productivity.

There is the argument that with more banks there will be increased competition, which should result in less fees being charged as people can move from one bank to the next. It is a myth to believe that in Jamaica more banks necessarily leads to the lessening of fees. This was certainly not the case when we had a plethora of banks and near-banks in the 1990s. Banks, like many businesses, are driven by a herd mentality. They will conform to the status quo that governs them; hardly any one of them is in the habit of bucking a trend.

Also, account portability between banks is not as easy as it appears. It is simply not easy for people to open accounts given the hoops that one has to jump through to do so. This is not entirely the banks’ fault, but relates to how banks have to now do business in a global environment. The banks must be commended for putting in processes and procedures, especially in the digital area, that has made the banking experience more pleasant and efficient.

But it still remains a source of frustration for the average person to open an account. It is frankly not that easy for people to move from one bank to the next. It is not like refusing to take one taxi because one knows that another will drive by in the next hour. Opening an account is quite tedious and cumbersome. So often you are stuck with the bank you have unless you have the mental and sometimes physical stamina to endure the process.

The society is becoming more aware that there is a problem impatient of solution in the issue of bank fees. It is not intrusive for Parliament or the Government to get them to do what they are not willing to do by choice. If one cannot police oneself so that one cannot be a danger or humbug to one’s neighbour, then it is quite reasonable for the police or other authorities to step in and do the job — in the public’s interest. The banks have opened themselves to this one and we will watch the people’s parliament on whether it will move with alacrity to correct this vexing problem.

Dr Raulston Nembhard is a priest and social commentator. Send comments to the Observer orstead6655@aol.com.