Committee rejects bill to cancel bank fees

BoI: Canceling fees on checking accounts would mainly hurt the poor.

knesset in rain 298.88 (photo credit: AP [file])
knesset in rain 298.88
(photo credit: AP [file])
A Knesset private members’ bill to cancel bank fees on checking accounts was unanimously rejected by the Ministerial Committee on Legislation Monday.
The bill is being spearheaded by Likud MKs Danny Danon and Carmel Shama, Israel Beiteinu MK Faina Kirschenbaum and the Israel Consumer Council. The Bank of Israel is opposed to it.
“This sad result shows that the Bank of Israel cares about protecting the banks while completely ignoring the consumer’s interest,” Kirschenbaum said. “It is even more disappointing that the Ministerial Committee on Legislation has decided to bow to this narrow opposition and ignore the interests of the consumer.”
The Israel Consumer Council said it had not been surprised about the decision because the Bank of Israel had lobbied against the bill.
“Members of the Ministerial Committee on Legislation on Monday disappointed consumers,” Israel Consumer Council CEO Ehud Peleg said. “The threats by the supervisor of banks had their intended effect. We were not surprised, but we don’t intend to give up. We will bring the public’s interest to the Knesset, and we are convinced that things will be different.”
The private members’ bill proposes the cancellation of 13 bank fees, including those for cash withdrawals, printing transaction records, making deposits or transfers between accounts, self-service deposits, paying bills and standing orders.
“The cancellation of bank fees for basic services on checking accounts would lead to an increase in the interest rate on credit,” the Bank of Israel said. “As such, customers using more credit will subsidize customers who are not using credit or those who are using very little credit. Therefore, the burden will fall mainly on customers who are in need of credit: the low-income population.”
The Israel Bank Association said the decision to reject the bill indicated that common sense had won over the campaign of the Israel Consumer Council, which it said had done a disservice to consumers by wasting public money.
“The Israeli consumer is enjoying good banking services at a cost of about NIS 18 a month on average, according to the Bank of Israel, which is relatively low compared with the global average,” the association said. “Intervention through legislation was a process that was unnecessary from the beginning.”