Published: 2007-03-05The top 10 questions to ask Canada’s banks
By JOEY FITZPATRICK personal Finance
ARE CANADA’S banks charging unreasonable fees for the services they provide? It’s hard to tell, because the banks are under no obligation to prove whether their fees — and their ever-record-breaking profits — are the result of a fair profit margin on services rendered, or of the continued gouging of Canadians.
When Canada’s finance minister, Jim Flaherty, sits down with leaders of the chartered banks today, he should take the opportunity to ask some hard questions, says Duff Conacher, co-ordinator of Democracy Watch and chairman of the Canadian Community Reinvestment Coalition.
Here then are the 10 key questions Conacher says the minister should put to the banks:
1. How many new fees has each bank introduced in the past 15 years in each area of their operations, what are the new fees, how many fees has each bank increased in the past 15 years in each area of their operations, and what fees have been increased?
2. How many fees has each bank decreased in the past 15 years in each area of their operations, and what fees have been decreased?
3. How much revenue and profit has each bank made from fees in each area of their operations each year for the past 15 years?
4. How much money has each bank saved in total over the past 15 years by withdrawing full service through shutting down branches and firing or shifting tellers to selling investment products and services?
5. Given that companies in other sectors providing essential services (for example, energy utilities) are required to justify any price increases in public hearings, will the banks agree to an independent annual audit (for example, by the auditor general) of the profit they make from every fee in every area of their operations, and agree to lower any fee if the audit finds excess profit?
6. How much has each bank’s credit card division cost, and produced in revenue and profit, each year for the past 15 years? Given that bank credit card interest rates have remained for the past decade at historically high levels when compared to the prime lending rate, will the banks agree to an independent annual audit of the profit they make from their credit card operations, and agree to lower interest rates if the audit finds excess profit?
7. How much money does each bank spend each year on each of the following three activities: 1) lobbying; 2) advertising, and; 3) donations (directly and through their foundations) and do the banks think it is fair that they charge their customers extra amounts for products and services in order to have this money to advance the banks’ agenda through lobbying, advertising and donations? In other words, do they think it is fair that bank customers pay the banks’ costs of pushing the banks’ agenda?
8. Will the banks help balance the marketplace by working with the federal government to facilitate — by enclosing a one-page promotion pamphlet in their mailings to their customers — the creation of a national, customer-funded, democratically structured, customer-directed "Financial Consumer Organization"? Such an organization, says Conacher, would change everything. "If you have a problem, the organization’s lawyer calls the bank, and all of a sudden everybody’s paying attention, because a lawyer who can take them to court is calling."
9. Will the banks work with the federal government to establish a much more comprehensive data collection and disclosure system, including a requirement that the Financial Consumer Agency of Canada disclose publicly the identity of every financial institution it finds in violation of the law, and review the profit-loss record for every proposed bank branch closure?
10. Given that most cheques are processed in one day, and many other payments are processed by the banks much more quickly than the time periods they actually use to give customers credit for deposits or payments or other transfers, will the banks agree to a regulated sliding scale of time limits for holds on cheques and payment processes that is stronger than the four- to seven-day cheque hold limit?
Joey Fitzpatrick is a Halifax-based writer.