Bank of Israel Shoots Down Bill to Kill Bank Fees

Succumbing to pressure from the Bank of Israel, the Ministerial Committee for Legislation did not conduct a debate scheduled for yesterday on a proposal to abolish service fees on checking accounts.

The bill is the brainchild of a group of Knesset members headed by Danny Danon (Likud), and was inspired by the Israel Consumer Council. Danon himself asked for the postponement after realizing he couldn't command a majority in the committee in favor of the proposal. That was because of firm opposition to the concept by Stanley Fischer, governor of the Bank of Israel, and by Rony Hizkiyahu, the supervisor of banks at the Bank of Israel.

Danon announced that he's asked for a meeting with Fischer this week.

Fischer spoke with committee members on Sunday in the hope of persuading them to oppose the idea.

It bears noting that several ministers skipped yesterday's session, including Dan Meridor, Limor Livnat, Yuli Edelstein and Yaakov Neeman, so Danon might be able to garner his majority after all.

Danon proposes the abolition of 13 different banking fees, including those for cash withdrawals, printing transaction records and the like at bank terminals, making deposits or transfers between accounts, self-service check deposits, paying bills, standing orders and more.

He argues that the bank fee reform instituted by the Bank of Israel merely led the banks to raise their fees on simple services for two thirds of bank customers.

A month ago Hizkiyahu said it was "problematic" to dictate fee structures to the banks. He also claimed that the cost of banking services in Israel is not prohibitive. On the contrary, he said: a package of basic bank services costs the equivalent of 55.6 euros a year in Israel, compared with the world average of 63.8 euro, Hizkiyahu said.