It is politically smart to pick on the big banks: after all, they are reporting quarterly profits of billions of dollars and you can score easy brownie points by claiming that they are gouging customers who are withdrawing their own money. But, really how bad is this problem? According to the NDP, the banks are earning $420 million from ABM fees. If we assume these figures are correct, ABM fees are costing Canadians an average of $21 a year, hardly worth all the bellyaching.
ABM fees would be an issue if we did not have any other option. But we do have plenty of options even if we are seniors, students or disabled:
- We could open a checking account at the nearest bank. When I was a student, the only bank on campus was Bank of Nova Scotia, so naturally that’s where I kept my account.
- We could avoid white-label and other banks’ ABM machines altogether.
- If we are out of cash, almost every business accepts a debit or credit card.
- We could request a cash back when shopping at our favourite retailer.
The government’s responsibility is to ensure that there is competition and choice available in the marketplace, not to regulate everything. Banking is certainly one area in which customers have plenty of choice and can arrange their affairs so that they don’t pay any fees to withdraw money. If they don’t it is their fault, not the banks.
Here’s a thought: how about being a smart consumer by opening a no-fee chequing account with PC Financial and buying the shares of your favourite big bank? You’ll avoid the high banking fees and thank everyone else who want to keep funding a portion of your dividend cheques.