Parliament votes to take on banks over fees and fairness
(CNS): Financial Services Minister André Ebanks has said the Cayman Islands Monetary Authority will be reviewing the fees retail banks are charging local customers and already has plans to amend the Registered Land Act to make it harder for them to foreclose on homeowners. Accepting a private member’s motion brought by the opposition leader last month, Ebanks ensured its passage and committed the government to consider legislation that would force local banks to adopt a code of conduct based on the UK’s new consumer banking rules
Roy McTaggart’s motion united MPs in their condemnation of how banks have behaved towards customers in recent years and the increased costs of banking fees even as interest rates have soared.
The opposition leader called for banks to voluntarily implement the code of conduct and reduce their fees, and if they refused, for the government to force their hands with legislation. He also asked the UPM administration to deal with the enforcement of mortgage-type security over real estate.
In his response, Ebanks confirmed that the draft amendments to the Registered Lands Act were on the government’s legislative agenda and that the premier would update the House on those changes to the law before the end of the year. He also said that CIMA will be doing a review that he expected to be “very informative”.
In a motion calling for higher standards, more transparency and fairness to customers, McTaggart said interest rates had significantly increased bank profits, but the fees they introduced to counter years of low interest rates had not been reduced. He told parliament that the issues listed in his motion were of crucial public concern, and the conversations that the PACT Government had begun with banks in 2023 had failed to advance.
He pointed out that the autonomy of modern banks is decreasing, and decisions are being made by people who know little or nothing about local customers’ needs. He said it was time now for banks to review the long list of fees they charge for almost every transaction, given the high interest rates that they are now enjoying. He said the 1% fee they charge for simply handling local currency or for accessing US currency “was unacceptable”, noting that cash was still legal tender.
McTaggart said the increase in interest rates was pushing more people into default on their home loans and that the government should implement the Law Reform Commission’s recommendations to address the area of foreclosures to prevent Caymanians from losing their homes due to the massive hike in interest rates over the last two years.
During the debate, MPs spoke about a catalogue of complaints about banks they had received from constituents. Chris Saunders noted that, according to a CIMA report, the banks made a whopping 25.3% return on their equity last year. This is double what CUC shareholders received under an agreement with the government that many see as a gold-plated profit deal.
See McTaggart present his motion and Ebanks’ response on CIGTV below:
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Category: Banking & money, Business, Laws, Politics
Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies. So said Groucho Marx.
There’s nothing the banks can do about interest rates. What they can change is EXCHANGE RATES. The Caymanian public is being robbed blind by the completely pointless US/CI exchange mechanism. The official rate is US$1 = CI$0.833, but the banks will only give you CI$0.82, meaning they have pocketed 1.33 cents for doing nothing whatsoever.
Retailers are even worse, often giving us CI$0.8 to the USD, meaning you are losing 3.3% of every dollar you spend.
This is not even the full picture. Other societal costs are imposed through the confusion created (every business has had customers pay US bills in CI and vice versa) and the additonal admin it creates, not to mention that the same money often goes back and forth between CI and US several times from end to end, racking up a pointless loss to the bank each time.
There is no equivalent in Bermuda. The Bermudian dollar is one for one and you can buy a US dollar for 1 Bermudian dollar. (There is a small spread of 0.4% to go from USD to BMD).
The irony is that, as usual, there are ways for the well-heeled to avoid the cost (banks offer preferential rates for large transfers) while the little guy is stuck with the biggest losses.
A good start to fixing this would be to outlaw local vendors making up their own rates. If we could spend KYD/USD without any losses, there would be less need to use banks to exchange money. Retailers should be in the business of selling goods, not changing currencies.
Parliament should also look into the extremely poor services provided by retail banks.
It takes months and months to obtain a final mortgage approval, even with long-standing connections to the islands. Also, try to open a bank account. LOL. It either never happens, or after providing volumes of documentation, a turtle could walk from East End to George Town faster than the bank responds.
Yes those maniacal and greedy and entitled employees who dream up these bank fees needed to be fired which only increase bonuses and privileges for the top management whilst customers loose homes and living from hand to mouth whilst they turn up their noses in their BMW and Mercedes Benz and high end suv and trucks and while they flaunt their lavish vacations on social media our children go without .Its time they be held accountable.But don’t be surprised if the come with their extortion & blackmail employment threat to justify their egregious and greedy scheme to ripoff customers with bullshit transactions fees like they are suffering by providing customers service.in favor of their aloof shareholders interest .
i agree with these changes…go at um palitarians…
CIG can help the public by opening access to the Credit Union. Pretty soon the Class A cartel would be out of business.
Making it harder for banks to foreclose sounds like a good idea. The inevitable result will be it’ll make it harder to obtain a mortgage as banks will be less inclined to do so if they get stuck with a non-paying customer and no recourse.
Where can I get 0.84? I get normally 0.82 at the bank.
Shouldn’t CIMA have already been assessing the Bank’s fees for reasonableness?
25c for each and every debit card transaction is outrageous.
Any explanation why Butterfield Bermuda customers earn a higher rate of interest on Fixed USD time deposits compared to Butterfield Cayman customers?
I suggest our Parliamentarians adopt a Code of Conduct themselves before requiring one from the banks.As for profits have they taken into account all the licence fees Government receives along with work permit fees.Trying to enforce edicts on how the banks run their business is a slippery slope as they can always move elsewhere. Have they looked at the profits the supermarkets make, with prices rising almost every day?.
Good. It’s about time CIG tackles something of some substance. I don’t know how much success they will have if they can’t even ensure CUC doesn’t continue to maul us – but at least this sounds like an actual attempt to do something.
What about enforcing an exchange rate that all businesses on island have to comply with?
why are wire fees scaled up in price when it is exactly the same amount of work. Proven for example charge $70 to $630 when sending between $10k and $1m. It should be a fixed charge regardless of the amounnt.
Banks have been robbing customers for years, maybe this time something will be done about it!
Exchange rate for CI to US is 0.84. They are already making 5% – but then they charge an additional 1%. WHY?
Criminal. CIMA should fine all these banks in the same manner that the SEC and FCA has done in the US and UK.