Greens proposal	ABA response
A ban on $2 ATM fees (for using a foreign ATM)	There are real costs associated with providing ATM services to another bank’s customers and banks legitimately recover these costs – just like any business does when it provides a service. Some of the costs which a bank incurs in providing an ATM fleet to customers are hardware, installation, cash delivery, security, information technology, maintenance, card issuing and rents to retailers. Bank customers don’t have to pay these fees – they can seek out an ATM owned by their bank or in a networked arrangement. Customers of banks who own an ATM fleet shouldn’t have to subsidise the cost of non-customers using their ATMs – this wouldn’t be fair. No other business is expected to provide free services to its competitors’ customers.
Fee-free basic bank accounts for all customers	Banks already provide basic bank accounts that allow customers on low incomes to access basic services at no cost. They also offer accounts which are free of exception fees. This accounts for one in six customers in the Australian banking population. All customers can minimise fees by choosing an account which suits the way they complete their banking and by staying within transaction limits.  Banks have many accounts where a number of transactions are free before charges apply. On exception fees – banks have been abolishing and reducing these fees over the past three years. The reductions in exception fees and the emergence of accounts which don’t charge these fees demonstrates the market is delivering results for bank customers.
Fair price on mortgages – fixing a gap on what banks pay for their money and the interest rate they charge	This proposal will disadvantage people on low-incomes and those intending to buy a home. It’s a throwback to the days of unfair regulation.  In the 1970s, a major reason for deregulation of banking (when there were interest rate ceilings and quantity limits) was to advantage lower-income people. Up until deregulation, the banking system typically benefited those who were wealthy and disadvantaged those who were poor.  The Reserve Bank recently made comments about margins on home loans which should reassure Australians who are working hard to pay off their homes. “Margins on variable rate housing lending relative to bank funding costs have actually declined a little over the past two years. The margin between the standard home loan rate and the cash rate has indeed increased, but with banks funding costs rising materially more than the cash rate, the overall margin has declined.”1
Up-front notification of exit fees	Banks already disclose exit fees when customers borrow to buy a home. Non-banks have the most expensive exit fees - they typically charge higher fees than banks, and it was these institutions that pioneered the use of deferred fees. Most customers don’t pay exit fees, because they are typically waived after three or four years.  The rate of home loan refinancing – particularly since the emergence of mortgage broking - remains strong. Australian Bureau of Statistics data shows that around 30 per cent of home loans (owner-occupied) are refinanced each year.

Senator Brown is incorrect when he says that Australian banks received taxpayer support via the Government’s wholesale funding guarantee.

Mr Münchenberg said:”Not one cent of Australian taxpayers’ money has been used to support our sector, unlike some banks overseas. In fact, the opposite is true - Australian banks and other lenders have so far paid taxpayers around $1.1 billion for the use of the guarantee and will pay around $5.5 billion over its full life.”
 
“The Government’s wholesale funding guarantee was a vital step to protect Australia’s competitive advantage during the global financial crisis, but was not a bailout.”

“It is important that policies which affect the banking sector are sensible, well-considered and workable because the banking industry is such an important contributor to the economy. Poor policies that create perverse and disadvantageous outcomes for Australians and our solid banking system are not in Australia’s national interest.”