Central bank: Ministry should regulate bank fees
The Bank of Israel's Supervisor of Banks, Yoav Lehman, yesterday issued a recommendation to the Ministry of Industry and Trade to regulate the price of certain bank fees. At present, government price regulation is in force on 14 of the 200 or so different fees charged by banks.
"I just received a letter from the supervisor of banks, which recommends imposing monitoring on a few products," Industry and Trade Ministry Pricing Supervisor Tzvia Dori said yesterday. "We will consider the request," Dori continued. "In principle, we do not like imposing regulation on products unless there is no alternative, for example when there's a monopoly that is raising its prices," Dori added.
The Ministry of Industry and Trade is the body responsible for regulating prices, in coordination with the Treasury. Overall, price regulation has been declining in recent years, remaining only on monopoly products such as cement, or staples such as flour and basic bread loaves.
Dori said the inter-ministerial pricing supervision committee will convene shortly, probably early next week, to discuss the matter. The committee is headed by treasury official Amir Asraf. If the committee decides regulation of certain bank fees is warranted, then the recommendation will be brought before the finance minister for approval. "In this context, the Ministry of Industry and Trade is only the executor of the decisions," Dori said.
Dori declared six months ago already that she needs directives from the banking supervisor in order to use her authority to impose regulations on banking fees.
Yesterday, after all three big banks raised their fees by tens of percentage points, Lehman decided to send his recommendations on the matter to the Industry and Trade Ministry. He emphasized yesterday once again that his department is not legally authorized to supervise banking fees.
In the past, however, Lehman shepherded the banking fees package that went into effect earlier this year, which among other things limited the fees to NIS 1.21 per transaction. In his letter to Dori, Lehman proposed regulating fees for credit agreements and credit card usage, among others.
"The banking supervisor's recommendation to regulate a very limited number of fees that represent the charging of duplicate fees on certain services, and his statement that the recent rise in banking fees seems to show that the level of competition in the industry is insufficient is a mockery," the Consumer Council said in response to the report. The council added that it appears that as usual, in the wake of public opposition, the regulator is attempting to pay lip service with a negligible, local solution that is insufficient to change the fact that in Israel there is no competition over the business of small banking customers.
The Knesset Finance Committee is to discuss the banking fee hikes in the presence of Lehman and representatives of the banks. MKs Reuven Rivlin (Likud) and Haim Oron and Shelly Yachimovich (Labor), who requested the meeting, claim the fee hikes are a slap in the face to the banking and capital reform law adopted in the wake of the Bachar Commission.
Committee member MK Stas Misezhnikov (Yisrael Beiteinu) claimed yesterday that the fee hikes were too high. "As a citizen I want an explanation of why they are raising the fees. There must be order in the matter of bank fees."
The Knesset plenum yesterday discussed the fee hikes. MK Moshe Sharoni (Pensioners Party) said it is untenable for the banks to raise their fees so often. He said the banking supervisor has to be aware of what the banks are doing. "It is intolerable that all banking customers in Israel are captives of the banks. There is a monopoly among the banks," Sharoni said.