Progressives call for UPM to take on banks
(CNS): Opposition Leader Roy McTaggart is calling on the UPM government to make Cayman’s high street banks implement a mandatory, modern code of practice, amend the Registered Land Act to enforce mortgage-type security over real estate, and ask CIMA to review the fairness of fees charged and interest rates paid on deposits. After years of low interest rates, banks had increased fees to improve profitability. But with eleven hikes over the last two years, bank profits are soaring while borrowers are struggling.
A private member’s motion filed by the PPM leader and seconded by his deputy, Joey Hew, notes that the agreement by local banks to give a 30-day notice before increasing mortgage interest rates has expired, though it did nothing to help those with increased payments, putting homes at risk of foreclosure and forcing them to come to government when they cannot afford mortgage payments.
McTaggart said the Law Reform Commission has already initiated a public consultation to consider a new Registered Land (Amendment) Bill, which the government could adopt. The goal is to reform the foreclosure process and to streamline the provision impacting the charge of land to provide for a lending and pre-action protocol to better protect borrowers.
The opposition said they want the government to encourage the Cayman Islands Banker’s Association to introduce a voluntary banking code that recognises the need for them to consider cases of financial difficulty sympathetically and positively, exploring options for alternative repayment arrangements for those in financial trouble. If not, the motion calls for government to consider legislation to provide for a mandatory code that will hold the banks accountable and protect their customers, especially those with mortgages.
The PPM members are suggesting that the code should be based on the one rolled out in the UK last year, which imposes a duty on banks to their customers, requiring them to deliver good outcomes and higher standards of consumer protection, including for loan foreclosures.
They have also called on the government to ask CIMA to review and report back to parliament by the end of this calendar year on the fairness of fees charged by retail banks and the fairness of interest rates paid on savings and other deposit accounts, ensuring that these rates and fees are fair and equitable for all customers.
While interest rates have reached the highest levels in decades for borrowers, the interest rate paid to customers with savings accounts or cash on deposit has barely moved from as little as 0.1% in some cases.
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Category: Banking & money, Business, Politics
Agreed on the KYD USD conversion rate which is massively in favour of the banks. But why don’t we just peg KYD to USD 1 to 1? How did we get .84 and .82? If anyone is expecting CIMA to do anything, you will be very disappointed.
What? Do you realize what you are saying.
The Cayman Islands government needs to instruct Class A bank licencees to modernise their post-Covid touchless payment infrastructure at merchant point of sale. Our banks (a universe of really just BNTB and CNB) are still forcing their clients to use large unreliable electronic bricks spooling-off thermal paper receipts. Making these old machines wireless, doesn’t make them contemporary equivalents to the rest of the world. The licensed credit card operators should also be instructed to adopt Apple pay/Google/Android device compatibility, and an entire universe of missing retirement savings products.
the Bank of Bilking is the king of ridiculous fees.
100% waffle.. full of populist soundbites. mortgage rates are out of our control…and banks will do everything possible to avoid forecloure. so no news here.
bank fees like everything else in cayman is a government protected rip-off scam.
Expect zero change from banks or insurance companies. Daylight robbery all round. But hey, screw the little people right?
Why are we paying banks to use our money to in turn make money. We are literally paying the banks to bank with them.
Alot more needs to be done, the banks here wont even accept money from Paypal, this place is ludacris and you have to wonder who is playing the fiddle in wonderland.
LTD da Unboozler
These are not new issues, which have gone unaddressed for years, and kicking the can down the road is not a viable solution. However, it could have been addressed far sooner.
The Cayman Islands Law Reform Commission (“LRC”) has already addressed some of these (and related) issues including, inter alia, the following:
(1) “The Enforcement of Mortgage-type Security Over Real Estate: Is Reform of the Law Necessary?” (dated 23 November 2019, LRC: Discussion Paper);
(2) “Registered Land (Amendment) Bill 2020” (an LRC Consultation Draft dated 28 August 2020) — which concerns, inter alia, affecting provisions impacting Charges and provides for Lending and Pre-Action Protocol; and
(3) “Usury: The Common Law and Statutory Position in the Cayman Islands” (dated 1 November 2021, LRC: Discussion Paper) — which includes a “Usury (Common Law Abrogation) Bill 2021” (an LRC Draft dated 11 January 2021) that is aimed at primarily abrogating common law usury that LRC’s research revealed is extant in Cayman law.
Please note the dates of the forgoing documents.
A few last questions as food for thought are as follows:
(1) Why is it that, despite having been identified by the Financial Action Task Force and the Department of Commerce and Investment is the regulator, the law concerning (non-bank, whether licensed or not) moneylenders are not addressed and enforced satisfactorily? Secured moneylending is a function that banks also carry out, but it’s not only banks that are actively involved in this commercial activity.
(2) Is there no concern that, with respect to certain Practice Directions that allow for extra-judicial (i.e., without having to get court approval) before enforcing Charges securing loans (similar to what many would call, albeit inaccurately, “mortgage enforcement”), at least in certain scenarios, this might allow for money laundering offences (contravening, inter alia, the Proceeds of Crime Act) to fly under the radar unnoticed?
(3) Has Parliament (including the DPP, Attorney General and the other two arms of government) turned a blind eye of connivance to, inter alia, criminality, illegality and/or consumer protection abuse for an extended period?
Just asking some questions.
They need to reign in these banks as one bank says you must use the ATM machine to make deposits but when you have rolls of coins the machine can not take them. So if you go to the counter the teller wants to charge you to make the coin deposit into your savings account. They are just being crooked and pure greedy.Some of these tellers seem like the enjoy sticking it to the customers.
so, if you don’t pay, the bank should foot the cost? have the government be the charity not a private company…once again, if you don’t like the fees, don’t bank with them. I don’t buy Versace because I can’t afford it, I shop at Ross…
smoke and mirrors from the Progressives again. Anyway, more importantly wheres the motion to regulate landlords and bring protection to Cayman’s renters
They passed the law in 2009 I think, just haven’t enacted it.
How about consumer protection laws generally? We are decades behind the rest of the world whilst we get ripped off by poor service.
Isn’t the stamp duty imposed by government? We should take that away. A lot of places won’t take cash overseas so to use your debit card to buy a bottle of water and get charged .20c every time is ridiculous.
Maybe just maybe they should limit the massive spread on the conversion between KYD & USD.
This is a massive risk-free profit engine for the banks.
One thing we should do which would be a massive pain in the neck and I’m not even sure how it would work…although I’m sure it’s possible…is to change the peg rate to 1:1.
It doesn’t make any sense that any time you go between two pegged currencies that the consumer loses one to three cents on the dollar. Do that math over your lifetime and all your earnings and expenses and imports etc and it really adds up.
What about the people who get paid in CI
This is a great idea. what is the justification for this exchange rate difference anyways? It is charged by CIMA when banks exchange usd/kyd there?
Why can businesses choose what exchange rate they use? Shouldn’t all car machines automatically do the conversion at the Bank’s rate? Shouldn’t businesses need a banking license if they’re also in the business of exchanging currencies?