The federal government may move to ban banks’ mortgage exit fees as a result of their failure to pass on the benefits of interest rate cuts to borrowers.
Cabinet sources reportedly told The Sunday Telegraph that the government was furious about the banks’ refusal to pass on this month’s rate reduction in full and was examining measures to increase competition for consumers.
Assistant treasurer Chris Bowen told the paper he was considering placing bank exit fees in a banned list of unfair contracts, in draft legislation, to be published next month.
“I’ve yet to reach a decision but a ban is one option,” Mr Bowen said.
Earlier this month NAB said there was no room to move on its home loan rates and ignored the full 25 basis point RBA rate cut, while CBA, ANZ and Westpac passed on just 10 of 25 basis points. All banks have attributed rising funding costs to their decisions to hold some or all of the rate reduction
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