Leader of the Australian Greens Bob Brown will introduce legislation to protect customers from unfair mortgage rate hikes by banks.
The new bill to be introduced in budget week would also require banks to cap mortgage exit fees, ban $2 ATM fees and offer basic, fee-free bank accounts.
The Australian Greens believe basic banking is an essential service.
It is wrong for banks to continue to post excessive profits when many Australian families are now struggling to pay their mortgages.
Australians require an innovative, responsive, competitive and reliable financial system that provides for the basic financial needs of the community. While the essential service nature of the banking system is recognized by the Australian Banking Association our banking system does not currently operate in this way.
Westpac this week announced a $2.8 billion half yearly profit, while ANZ recorded a $2.3 billion profit.
The Greens bill will rein in excessive profiteering by banks on mortgages by requiring them to offer ‘fixed gap mortgages’.
These are mortgages that link interest rates to the lender's cost of funds so that the rate borrowers pay only increases by the amount lender's costs increase.
Even during the height of the financial crisis, Australia’s big banks were able to post huge profits because they were the beneficiaries of massive taxpayer support.
The Greens will introduce their Banking Amendment (Delivering Essential Financial Services for the Community) Bill 2010 to ensure that banks provide access to essential banking services and deliver greater fairness and transparency to banking customers.
Details of the Greens proposals can be viewed in the attached file.