The NDP has got something right

[Guest Derek L]

Once in a blue orange moon the NDP proposes something that most Canadians, including myself, can agree with:

http://www.cbc.ca/news/politics/ndp-steps-up-battle-against-atm-fees-1.2520486

The NDP is renewing its mission to cap ATM fees.

A motion calling for the cap will be debated in the House of Commons on Monday. It urges the Conservative government to take action on ATM fees in its upcoming federal budget.

Glenn Thibeault, the NDP's consumer affairs critics, says Canadians shouldn't have to pay two or three dollars to withdraw their own money from bank machines — particularly when it costs banks as little as 36 cents to complete the transaction.

The NDP proposal would cap ATM withdrawal fees at 50 cents per transaction.

I’ve no issue with the Banks charging a fee to cover their costs, that’s only reasonable, but making money off their customers accessing their money, in my view, isn’t right…….utter piracy.

As mentioned in the CBC article, the Tories looked at this prior, as such, I hope the Tories get onboard this NDP proposal.

Props to the NDP for proposing something Canadians might actually support……unlike Trudeau’s “unLiberal Senators”!!

Edited February 3, 2014 by Derek L

[TimG]

I’ve no issue with the Banks charging a fee to cover their costs, that’s only reasonable, but making money off their customers accessing their money, in my view, isn’t right…….utter piracy.

People are charged when they use Interac and the charge is by the network operator and it is not charged by the bank of the customer getting charged. Most banks offer free withdrawals if you use their machines. I think it completely unreasonable to tell banks that they must pay the cost of an outside service provider on behalf of their customers. All such a law means is the monthly charges for accounts will go up and that pisses me off because I am careful enough to use my own bank's machine and I don't see why I should pay more because other people are too lazy to do so. Edited February 3, 2014 by TimG

[bleeding heart]

But the idea isn't to "tell banks that they must pay the cost of an outside service provider"; as Derek pointed out, the proposal would allow a smaller fee...one that would still cover their costs. (And a little extra, in fact.)

[Keepitsimple]

Once again - it's something that sounds good on the surface - but when you drill down, things look a little different. As Tim pointed out, most ATM transactions are free if you use tyour own Bank's machines. I can't recall EVER using another Bank's machines.

If you do use another Bank's machine - that's where the Interac service comes into play - it's run by a consortium of Banks but is legally a not-for-profit organization.

Interac Association is a Canadian organization linking enterprises that have proprietary networks so that they may communicate with each other for the purpose of exchanging electronic financial transactions. The Association was founded in 1984 as a cooperative venture between five financial institutions: Royal Bank of Canada, CIBC, Scotiabank, Toronto-Dominion Bank, and Desjardins. A 2010 request by Interac to become a for-profit organization was rejected by the Competition Bureau.^[1]

By 2010, there were over 80 member organizations and there were over 59,000 Automated Banking Machines that can be accessed through the Interac network in Canada and over 450,000 merchant locations accepting it.

Interac's head office is located at Royal Bank Plaza in Toronto.

Edited February 3, 2014 by Keepitsimple

[TimG]

But the idea isn't to "tell banks that they must pay the cost of an outside service provider"; as Derek pointed out, the proposal would allow a smaller fee...one that would still cover their costs. (And a little extra, in fact.)

If the outside provider charges 1 to 2 dollars then those are the costs. The 36 cent figure is thrown out but without a source it is not something that can be treated as credible.

[Boges]

WAAAAHHHHH!!!! ATM Fees!!!!!

Don't want to pay ATM fees?

Cut a deal with your bank for a flat rate or purchase everything with a Credit Card so you only have to make one transaction a month.

I don't pay many fees because I keep a minimum balance and that allows me to get a credit each month.

Also if Bank Fees are such a big problem with people who don't want to manage their money properly then perhaps they should go with a bank that doesn't charge for fees like PC Financial. I'm led to believe you can even take your money out of a CIBC ATM with PC financial because their owned by them.

I'm sure the same goes for ING Direct and Scotia Bank.

Edited February 3, 2014 by Boges

[cybercoma]

I'm sure working families have no problem "cutting a deal with their bank" or "using credit cards to pay for everything." Come on, Boges. The fees charged by banks are nothing less than usury. You pay a monthly fee, in most cases, for your account and transactions to begin with. Then you're charged again when you use ATMs. At best it's double-dipping. This proposal takes into account the cost of doing business and even allows room for profiting off people accessing their money. What it's not allowing is them to make profit in the neighbourhood of 6x their costs for allowing people to get their money out of the bank.

[Guest Derek L]

People are charged when they use Interac and the charge is by the network operator and it is not charged by the bank of the customer getting charged. Most banks offer free withdrawals if you use their machines. I think it completely unreasonable to tell banks that they must pay the cost of an outside service provider on behalf of their customers. All such a law means is the monthly charges for accounts will go up and that pisses me off because I am careful enough to use my own bank's machine and I don't see why I should pay more because other people are too lazy to do so.

As said several times, charging a fee to cover the cost of usage is not at issue. Why would you have to pay more?

[Shady]

I disagree with this proposal. If you don't like your ATM fees, do business with a bank etc that doesn't charge them or charges less.

[Boges]

As said several times, charging a fee to cover the cost of usage is not at issue. Why would you have to pay more?

Shareholders FTW.

You're asking them to hold your money for you, you always have a mattress or a safe if you don't want to pay a fee.

I'm not trying to a brown-noser for the banks BTW. I just think people need protection against themselves for poor financial choices.

[Guest Derek L]

Once again - it's something that sounds good on the surface - but when you drill down, things look a little different. As Tim pointed out, most ATM transactions are free if you use tyour own Bank's machines. I can't recall EVER using another Bank's machines.

If you do use another Bank's machine - that's where the Interac service comes into play - it's run by a consortium of Banks but is legally a not-for-profit organization.

Not-for-profit? Come on, I bank with CIBC, but if I use an ATM through say Royal Bank I pay two bucks.....but if I use the machine down at the local pub or corner store, I've seen fees as high as $3.75....

In the United Kingdom, they some how mange to have zero fees at all ATMs.....

[Boges]

Not-for-profit? Come on, I bank with CIBC, but if I use an ATM through say Royal Bank I pay two bucks.....but if I use the machine down at the local pub or corner store, I've seen fees as high as $3.75....

In the United Kingdom, they some how mange to have zero fees at all ATMs.....

I've seen fees at some establishments as high as $8. They don't put those machines there as a public service.

[Guest Derek L]

WAAAAHHHHH!!!! ATM Fees!!!!!

Don't want to pay ATM fees?

Cut a deal with your bank for a flat rate or purchase everything with a Credit Card so you only have to make one transaction a month.

I don't pay many fees because I keep a minimum balance and that allows me to get a credit each month.

Also if Bank Fees are such a big problem with people who don't want to manage their money properly then perhaps they should go with a bank that doesn't charge for fees like PC Financial. I'm led to believe you can even take your money out of a CIBC ATM with PC financial because their owned by them.

I'm sure the same goes for ING Direct and Scotia Bank.

I bank with CIBC, and yes, there are no fees through Superstores etc.....and yes, I've got a rather large balance, but that doesn't appear to make a difference if I go to the local ESSO (Royal Bank) or the local corner mart.........

[TimG]

Not-for-profit? Come on, I bank with CIBC, but if I use an ATM through say Royal Bank I pay two bucks.....but if I use the machine down at the local pub or corner store, I've seen fees as high as $3.75.

The machine at the local pub is not owned by a bank. The fees go to the owner of the machine. If you expect governments to cap fees charged by those machines two things will occur:

1) The number of these machines will decline because they are no longer profitable enough.

2) Monthly fees on bank accounts will go up and customers that manage their money will be forced to subsidize the lazy.

I really don't see how the consumer can possibly benefit in the long run.

[Guest Derek L]

Shareholders FTW.

You're asking them to hold your money for you, you always have a mattress or a safe if you don't want to pay a fee.

I'm not trying to a brown-noser for the banks BTW. I just think people need protection against themselves for poor financial choices.

Or the inverse….price gouging………As I said, not a fee across the United Kingdom, and their banks, some older then Canada, seem to manage.

[cybercoma]

If you don't like your ATM fees, do business with a bank etc that doesn't charge them

Great idea. Give us a list.

[Boges]

I'm sure working families have no problem "cutting a deal with their bank" or "using credit cards to pay for everything." Come on, Boges. The fees charged by banks are nothing less than usury. You pay a monthly fee, in most cases, for your account and transactions to begin with. Then you're charged again when you use ATMs. At best it's double-dipping. This proposal takes into account the cost of doing business and even allows room for profiting off people accessing their money. What it's not allowing is them to make profit in the neighbourhood of 6x their costs for allowing people to get their money out of the bank.

I've never heard a banking account that charges a flat fee and service fees above and beyond. Of course that applies if you don't use your bank's ATM but them's the breaks. There are also banks that don't charge fees.

I've even been told by someone at my banks (regarding my savings account) that there is a way I can lower my fees.

There are so many ways to reduce service charges, people are just lazy, they want to be able to take out $20 bucks at a time several times a month.

Edited February 3, 2014 by Boges

[Guest Derek L]

The machine at the local pub is not owned by a bank. The fees go to the owner of the machine. If you expect governments to cap fees charged by those machines two things will occur:

Yes I know.

1) The number of these machines will decline because they are no longer profitable enough.

Nobody is saying they can’t charge a fee to cover costs with a slight profit margin.

2) Monthly fees on bank accounts will go up and customers that manage their money will be forced to subsidize the lazy.

How so? The Canadian banking sector is healthy, and I’ve no issue with them making vast profits, but as said, British Banks seem to manage without gouging their customers.

[TimG]

As I said, not a fee across the United Kingdom, and their banks, some older then Canada, seem to manage.

The UK system is abusive in other ways. For example, you cannot transfer your mortgage. Once you have signed on with a bank you are stuck with them for 25 years even though they make no promises when it comes to the interest rate (i.e. after the initial period expires you have to take whatever they decide to give you).

[cybercoma]

you always have a mattress or a safe

Do you know what it would do to the banking industry, not to mention the entire economy, if people stopped having banks hold their money? The entire system is fundamentally based on it. You're right. People should, given the ridiculous costs banks are now associating with using them. However, it's an insane position to insist that people pull their money from the banks as a solution.

[TimG]

Nobody is saying they can’t charge a fee to cover costs with a slight profit margin.

What is so special about running an ATM that requires government intervention? Do you think hair stylists and dentists should have their fees capped to allow only a small profit margin? There is no monopoly here. People always have the choice of planning ahead and getting the cash they need from their bank.

How so? The Canadian banking sector is healthy, and I’ve no issue with them making vast profits, but as said, British Banks seem to manage without gouging their customers.

ATM fees are not the banks gouging customers. It is the owner of the machine which is charging for the service. It is absolutely crazy to suggest that banks be forced to pay for outside services that their customers choose to use. If governments do this then banks will have to recover the costs.

[cybercoma]

There are also banks that don't charge fees.

Such as? Why wouldn't EVERYONE switch to them then?

[Boges]

Such as? Why wouldn't EVERYONE switch to them then?

PC and ING immediately come to mind.

And as mentioned earlier. People are lazy, they'll just pay the fees and wonder where all their money went.

Edited February 3, 2014 by Boges

[Guest Derek L]

The UK system is abusive in other ways. For example, you cannot transfer your mortgage. Once you have signed on with a bank you are stuck with them for 25 years even though they make no promises when it comes to the interest rate (i.e. after the initial period expires you have to take whatever they decide to give you).

So? No need to emulate the perceived negative aspects of UK banking…..As I said, the UK can manage with no fees, but Canadian banks couldn’t manage with smaller fees that cover the cost of transaction…..come on.

[TimG]

Such as? Why wouldn't EVERYONE switch to them then?

Because most people think they get value for the service they get and the people complaining are the minority. If people really cared as much as the NDP and others claim they would switch.