Hey Lise, read this? lol.
[A href="http://www.canada.com/nationalpost/story.html?id=73ce6572-79d5-4578-8dc3-10fcdc3a4770&k=76427"]http://www.canada.com/nationalpost/story.html?id=73ce6572-79d5-4578-8dc3-10fcdc3a4770&k=76427[/A]
[DIV class=storyheader] [H2]Tories, NDP eye ATM fees[/H2] [H4]Banks asked why other nations get cash for free[/H4]
[DIV class=feed_details] [H4]Duncan Mavin in Toronto and Paul Vieira in Ottawa, National Post[/H4][SPAN]Published: Friday, January 26, 2007[/SPAN]
Finance Minister Jim Flaherty is demanding Canada's banks explain why they charge fees to customers for using automated bank machines.
Mr. Flaherty said yesterday he has raised the question of scrapping the fees with the banks, and he is awaiting their response.
Bank customers use the machines, also known as automated teller machines or ATMs, for more than a billion transactions each year. Customers are charged for some of those transactions -- typically there is a fee of $1 to $2 for withdrawing cash from a machine owned by a bank at which the customer does not have an account.
The Finance Minister said he is particularly concerned to find out why Canadian banks charge the fees to their customers while banks in some other countries do not.
"The issue is that the practice by some banks in other countries is not to charge," Mr. Flaherty said. "Is there a justification or a rationale for that being particularly different in Canada than in other places?"
Banks in the United Kingdom and some in the United States do not charge similar fees.
Mr. Flaherty was speaking to reporters as Conservative MPs meet in Ottawa to discuss the government's strategy once the House of Commons reconvenes on Monday.
His comments on ATM charges echoed those of NDP leader Jack Layton, who held a news conference on a freezing corner in downtown Toronto yesterday morning to highlight what he called "these outrageous fees."
Mr. Layton pointed out that customers of Toronto-Dominion Bank's branch network in the United States do not pay fees for using ATMs while customers in Canada are charged for using the machines.
"TD Bank doesn't think its American customers should have to pay these fees -- only its Canadian customers," Mr. Layton said. "Why do people in the U.S. and the U.K. get a break from their banks, but ordinary Canadians get gouged?"
Clement cartoon, Page A12 CIBC was pushed to reveal lost files: privacy watchdog. FP1
The NDP estimates Canadians pay out about $420-million a year for the privilege of using ATMs. That represents about 5% of the revenue of the biggest banks in Canada, which turned in record profits of more than $19-billion in 2006.
Mr. Layton said the NDP will press for changes to the banking laws to eliminate the fees.
Given the current configuration in the House of Commons, the NDP is in the position of holding the balance of power. The recent defection of Wajid Khan from the Liberals to the Conservative ranks and the sudden resignation of Liberal Jean Lapierre means the Conservatives and NDP account for 154 MPs, compared with the 153 controlled by the Liberals and Bloc Quebecois. (One Liberal MP is the Speaker of the House, who only votes to break a tie.) There are two Independent MPs.
But at least one political analyst said he is skeptical that Mr. Flaherty would force the banks to roll back their ATM fees.
"I suspect the banks would have some tools at their disposal to fight that," said Nelson Wiseman of the University of Toronto. "What if the banks rolled up their ATMs? There would be a revolt.
It is something that everybody would like, but it's not attainable and it's not going to happen. You are scoring points with your constituency -- which is perfectly OK. That's what political parties are supposed to do."
Nevertheless, Mr. Flaherty has shocked the corporate landscape before, most memorably with his decision last Oct. 31 to slap a tax on income trusts.
The banks have already suffered a setback at the hands of the Tories. Among its first orders of business was to reject the big banks' push to be allowed to sell insurance products in their branches. This was seen as a move to appease insurance brokers, who are well-organized within the Conservative party.
The perception is that the Conservative party would be more receptive to the demands of big business. But political analysts say the party's values are more in line with small business owners, in contrast with the old Progressive Conservative party, which had the backing of the Toronto and Montreal financial establishments.
Meanwhile, the Canadian Bankers Association delivered the banking industry's response to the calls for an end to ATM fees.
The CBA, which is the main lobby group representing the banks, said the proposal is "anti-consumer and anticompetitive."
"It's like saying to clients of a gym, 'We're going to let customers of other gyms in to use the weight room. We're not going to charge them, and you'll be subsidizing their use of it,' " said CBA president Ray Protti.
"Mr. Layton said that customers in the United Kingdom are not charged these fees," Mr. Protti said. "However, he should realize that services are not delivered for free. There is a cost to providing banking services. Looking at one service in isolation does not take into account that the costs to provide it are recouped through higher costs for other products and services."
[H6 class=copyright]© National Post 2007[/H6][!-- pagination start --]
