‘REVIEW FEES FOR LOAN DOCUMENTS’
Banks’ practice against the law, a burden to customers, says Bar Council official
THE Bar Council said it is high time banks reviewed the practice of imposing fees on loan documents.
Bar Council Conveyancing Practice Committee chairman Datuk Roger Tan said the practice was against the law and had a become a burden, which consumers could do without.
He said the fee was imposed on banks’ loan documents, which borrowers signed when taking, for example, a housing loan.
“These documents are standardised for each bank.
“The bank’s solicitors will download the documents from the bank’s website and, after completing particulars relating to the borrower and the loan, print it out for the borrower’s signature.”
He said banks charged a fee of between RM100 and RM500 for the purchase of the documents, even though the cost of printing the documents was borne by solicitors.
He said the document fee was usually passed on to borrowers as part of solicitors’ charges.
However, Tan said, in some cases, solicitors were compelled by the banks to absorb the costs.
“This results in borrowers having to pay additional costs when taking a loan from a bank and solicitors getting peanuts for the professional work done, especially purchasers of low- and medium-cost and affordable homes.
“The Bar Council objects to banks charging such a fee.”
He cautioned against imposing the fees as the sale of loan documents was a breach of section 37(2) of the Legal Profession Act 1976.
That subsection states that any unauthorised person, either directly or indirectly, draws or prepares documents relating to any immovable property for or in expectation of any fee or gain shall be guilty of an offence under that subsection.
Tan said the Bar Council regretted that despite several representations made to Bank Negara Malaysia, the central bank had failed to put a stop to the “unhealthy practice”, which unfairly increased consumers’ financial burden.
He said this would, in turn, mean that BNM failed in its role as the regulator of banks in Malaysia.
“The central bank cannot wait for the Federal Court to intervene again before it decides to act on it just like in the case of the British borrower Anthony Lawrence Bourke and his wife, who succeeded in declaring that it was unconscionable for banks to seek refuge behind exclusion clauses.
“BNM must lead and spare a thought for borrowers and solicitors, who are often at the mercy of this unequal bargaining with powerful financiers.”
He, however, welcomed a recent move by banks to do away with charges for cash and cheque transactions for credit cards and financing repayments for overthe-counter and cash deposit machine transactions.