By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Central Bank’s top inspector yesterday said he had little sympathy for those complaining about bank fees since it was their “own damn fault if they are too lazy to switch” to online banking.

Charles Littrell, the regulator’s head bank and trust company overseer, told Bahamas Institute of Chartered Accountants (BICA) members that “probably 80 percent” of the fee cost was generated by people’s “banking habits” in preferring to conduct their financial business in-person at commercial bank branches.

Speaking during the Accountants Week seminars, he pointed out that Bahamians and residents needed to better exploit the Sand Dollar, the Central Bank-backed digital currency, as well as online and digital banking plus “remote payment systems” to reduce fee-related costs associated with conducting their financial transactions.

Mr Littrell’s blunt remarks came in response to a question that referenced Mia Mottley, the Barbados prime minister, who cited bank fees in recently threatening banks with legislative action if they did not increase their lending to businesses and individuals in the Caribbean nation.

“Bank fees are a great thing for politicians to whinge about,” he replied. “Most banks would be happy not to charge those fees.” Describing the long lines that have formed outside Bahamian commercial bank branches in the COVID-19 era, Mr Littrell added: “Ninety percent of people in those queues would be better off doing online and electronic banking.

“Our banking habits impose costs on the banks that are reflected back in their fees..... Probably 80 percent of the fees generated are [the result of] the choice of people in how they do business. I don’t have a lot of sympathy for that.”

Asserting that a significant portion of bank fees were designed to cover costs associated with in-person banking at branches, Mr Littrell added: “We’re in the middle of a pandemic. Do your banking online, do your banking on a mobile phone, look at remote payment systems and things like that.......

“If people are too lazy to switch, then it’s their own damn fault. Don’t come complaining to us about fees when you could have switched.” His comments are likely to provoke controversy, especially among elderly Bahamians and others wedded to in-person banking. And Fred Mitchell, minister of foreign affairs, blasted the banking industry’s fees as recently as last week.

Bank fees have long been a source of consumer complaints, with many Bahamians viewing them as unreasonable and believing they have undergone successive increases to help compensate the sector for loss of interest income due to high loan delinquencies.

A Central Bank survey released earlier this year found that almost two-thirds of Bahamian businesses feel the fees charged by commercial banks need “major improvements”. The result was divulged in the regulator’s Business Digital Payments Survey, which showed an increasing trend of companies moving towards electronic channels to conduct transactions.

The research, which focused largely on micro and small companies with annual turnover of $5m or less, said: “When asked to give their opinion on the level of changes or improvements needed in the current state of digital payments in the country, 64.3 percent of businesses said that fees charged by financial institutions required major improvements.”

John Rolle, the Central Bank’s governor, in January 2021 pledged to deliver “greater transparency” on commercial bank fees. Acknowledging that “governance, transparency and consumer protection will also require bolstering”, Mr Rolle said the Central Bank planned to start by producing more openness around commercial bank fees.

“One near-term deliverable will be publication of more comparable information on the fee structure of financial products across banks, using a standardised template that has been already developed. This would promote more informed choices across products and services being provided by competing institutions,” he argued.

“The bank will also consider what regulatory avenues can be exploited to promote transparency around fee setting practices under the Payment Systems Act. In addition, as regards mobility and choice, the Central Bank will explore medium-term reforms around the feasibility of open banking, having full regard to regulatory proposals that would encourage product development, but keep consumer protection in full view.

But, back in 2017, Mr Rolle argued that “a persuasive case” cannot be made that price controls work properly as he reiterated his stance against their imposition on bank fees.

Addressing the Rotary Club of south-east Nassau, he warned that placing price controls on commercial bank fees “is not an outcome” the Bahamas should seek, as it will not protect consumers.

Rather than impose such restrictions, he said competition was critical to keeping bank fees in check, adding that price controls will “not accomplish much” unless the underlying structural issues and costs relating to the provision of financial services in the Bahamas are addressed.

Responding to complaints from Rotarians that banks are providing “less service for more cost”, the Governor replied: “These fees are not regulated in the Bahamas in terms of their level.

“It [price controls] is not something we should want to see as an outcome. The issue here is being able to have a choice, to have a more competitive environment to exercise choice when necessary.”

He added: “There are some elements of a consumer protection framework in The Bahamas, but a lot of it is built around price controls on fuel, food and a few other areas. In this area, we cannot argue persuasively that these controls accomplish as much as we would like.”