Economics Committee Demands Banks Promise in Writing Not to Hike Fees

Bank reps told the panel there were no plans to hike fees, but word of mouth didn't satisfy the parliamentarians


The Knesset Economics Committee is turning aggressive about bank fees. Israel's three biggest banks already promised they wouldn't raise the fees they charge households, but the committee is not satisfied. It wants the promise from Bank Hapoalim (TASE: POLI'>">POLI   ), Bank Leumi (TASE: LUMI">LUMI>) and Israel Discount Bank (TASE: DSCT">DSCT>) in writing.

The written promise must also spell out the period of time through which the banks' fees would be frozen.

Although the Supervisor of Banks over at the Bank of Israel - Yoav Lehman - objects to the initiative, the Knesset Economics Committee decided to set up a sub-committee that will monitor the banks, mainly in respect to the hot-button issue of the fees they charge.

The Knesset Economics Committee convened specially on Monday, at the urgent behest of Meretz Knesset member Avshalom Vilan, to discuss the banks' intention of raising their fees by 5% in June 2006. Until that time, they were prohibited by an agreement they had entered a year ago from raising fees. Said agreement had been between the banks, the Supervisor of Banks and the Antitrust Authority.

Yesterday representatives of the three big banks told the Economics Committee  that they didn't mean to raise charges for consumers at this time. The Bank Hapoalim representative said the management had not even discussed an increase, and that when the agreement expires, fees would stay where they are.

Gideon Shor of Bank Leumi also said there had been no internal discussion about raising fees, and David Parnas of Bank Discount stated that the bank had no plan to raise fees in the foreseeable future.

Economics Committee chairman Moshe Kahlon (Likud) told the bank representatives that the committee wanted a letter in writing, that they wouldn't be raising the fees they charge, and for what period of time the suspension would remain in force.

Gilad Ardan (Likud), who had opposed the agreement from the start, said the legislators should enact a law protecting consumers, not make deals with the banks.

Amnon Cohen (Shas) proposed that a basket of fees be determined, and not limited to a single year either.