Under fire
THE Bank of Jamaica (BOJ) came in for harsh criticism on Wednesday at a meeting of the Public Administration and Appropriations Committee (PAAC) as the Opposition Member of Parliament (MP) Fitz Jackson accused the central bank of being complicit in the unfair customer practices of commercial banks.
Jackson dismissed talks that regulating fees and other policies would undermine the banking system, arguing that it is the strong regulatory regime laid down by the BOJ that has preserved the sector over the years from the financial sector meltdown of the mid1990s, through the economic crisis of 2008/09, to the current economic challenges. “This notion about regulation is going to impede banking is dishonest. None of the banks are complaining about losses over these turbulent periods, but the customers, they are the ones who suffer annually. on the surface of it, your institution appears complicit with what has been taking place by the banks because you are the regulator,” Jackson stated.
In a separate interview, Jackson told the Jamaica Observer, “Another contradiction...is the minister saying recently in Parliament that it is unacceptable in a free market for the Government to direct what fees should or should not be charged, but at the same time, as Senator Crawford pointed out in his sectoral presentation, they are setting fees that taxi men should charge.”
He pointed out, for example, that the BOJ had not acted when banks were charging dormancy fees in breach of the BOJ Act: “So the banks violate the laws, get away with it, and you the regulator keep dead silence. Who is going to protect the people out there if you’re not going to do it? You’re the legal institution.” BOJ Governor Richard Byles explained that the BOJ Act doesn’t provide all the tools needed to manage how commercial banks deal with customers, but that a Consumer Protection Act is now being drafted that should address the issues. “That is what will give real teeth to the central bank to monitor, manage, and administer the worst aspect of the relationship between DTIS [deposit-taking institutions] and customers,” he said. At the same time, Jackson argued that there must be a way to arrive at an acceptable standard of minimum information requirement from customers across banks. “If a customer wants to go into another realm of banking and it needs a certain other level of information against money laundering, fine, but there must be some minimum standard [just] as you routinely impose in a number of different areas that all banks must adhere to,” he said. The MP argued that the BOJ has not, over the years, done anything to ameliorate banking practices and policies which put the consumer at a disadvantage, yet laws and policies which favour bankers are quickly rushed through Parliament.