Banks Lobbying Hard to Restrict Bank Fee Supervision

They propose voluntary reduction of the number of fees and limited regulation of rates

The banks are lobbying Economic Affairs Committee members to limit the scope of a bill that would cap bank service fees charged to households. The bill is slated for debate this morning.

Some panel members are concerned that a few Knesset members will surrender to the banks' pressure and limit the definition of the types of bank accounts affected by the bill.

The Director of the Banks Association in Israel, Moshe Pearl, and Erez Gilhar, a member of Lobbying Policy that represents the association, met with several committee members yesterday in order to persuade them that the bill is unnecessary.

Knesset sources said that some bank leaders had even phoned committee chairman Moshe Kahlon (Likud) requesting that the bill be curbed.

The association argues there is no need for a bill and that a voluntary reduction of the number of fees and limited regulation of rates would suffice.

The banks have also raised a number of proposals, according to which increased regulation would be limited to "a customer with a personal account used only for household expenses" and not for businesses.

Knesset members and the Bank of Israel, on the other hand, believe the bill should apply both to households and businesses.

The committee is set to complete preparation of the bill within the next few days, prior to the second and third reading, which is set to take place next Tuesday. The plenum approved a similar bill submitted by the Bank of Israel in its first reading yesterday, which may be consolidated with the non-partisan bill submitted by Kahlon, Amnon Cohen (Shas) and Gilad Erdan (Likud).

"Households in Israel pay too high a price for bank services," Kahlon said. "The committee investigating bank fees has recommended limiting the number of fees, consolidating a standardized list of fee names, and maintaining a policy of reducing the obstacles for the transfer of customers from one bank to another. These steps should be temporarily limited through legislation, and their implications should be reexamined after a period of time."

"In the short term, we agree that the central and most important move is to provide the Bank of Israel authorization to regulate prices of bank services, and we ask that the Economic Affairs Committee promote this law," Supervisor of Banks Rony Hizkiyahu wrote in a letter to the Knesset. "In the medium term, we believe that the issues raised require thorough consideration due to their complexity and the repercussions they may have on the economy."

Banks Association spokesman responded that "all insinuations of lobbying by the banks are inaccurate. The banks have nothing to hide. It is correct that the director of the association has met with Knesset members to present his side. This was done as is acceptable practice, and there is nothing improper in doing so."