Deliberately obfuscating the issue of banking fees?
The issue of banking fees has been a hotly debated topic within public spaces and Parliament.

I have taken note of the points raised in the Jamaica Observer article of July 3 titled ‘Dealing with the issue of banking fees’ and the attempt to be balanced in the matter.

However, I believe the contentious issues raised about banking fees are being conflated with general or overall fees charged by banks. This, I am convinced, has been deliberate by those who are attempting to obfuscate the real issues of concern.

The current debate emanates from the motion in Parliament on the matter and the subsequent Banking Services Bill tabled in 2017. This Bill was eventually debated in February 2018 and defeated by the Government’s majority who voted en bloc, while the then Opposition voted in support, also en bloc.

The Bill makes no reference to fees charged by the banks for transactions involving the banks’ funds, such as loans, mortgages, overdraft facilities, etc. But, rather, relates only to depositors’ transactions against their accounts involving their own funds being in the banks, such as when making deposits, withdrawals, and inquiring on transactions against their accounts. The Bill seeks to provide a minimum service package in which fees for these transactions would be prohibited as they effectively diminish the account holders’ funds, which are there for safe keeping.

Let me hasten to say that no one has so far pointed to even one clause or section of the Bill to be egregious, yet they object to its passage.

Depositors’ funds are the means by which banks obtain funds for on-lending to create revenues to cover expenses and earn profits for their investors. These expenses would include real estate costs, utilities, promotions, public relations, and salaries, along with the perks provided (regardless of how high they chose to make them).

The defenders of maintaining the current charges against depositors’ transactions, including Minister Nigel Clarke and the Government on whose behalf he speaks, have posited that to prohibit such charges would cause financial system instability. However, the same minister simultaneously argues that the contentious amount of fees being charged by the banks are minimal and not a substantial portion of the bank’s profits.

Both positions cannot be true, as even the uneducated can see. This is sad and unfortunate and is the basis on which I told Minister Nigel Clarke in Parliament that he has clearly become the chief spokesman for the banks and not the whole of Jamaica.

We all are fully aware that the banks’ adopted business model of charging these fees is totally risk-free. All they have to do is skim small unnoticeable amounts off each of the depositors’ transactions and they can make super profits. This is unlike making loans and other creative financial instruments with meaningful intellectual applications. In so doing, pensioners, small and medium size business people, etc suffer reduced cash flows that are being diminished by the multiple extracted fees from their accounts.

It is my hope that honest and frank discussions on this matter will prevail and eventually the depositors will get a fair deal.

Fitz Jackson

Fitz A Jackson is Member of Parliament for St Catherine Southern.

Fitz Jackson

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