OVERDRAFT CHARGES

Press, Volume C, Issue 29620, 16 September 1961, Page 12

OVERDRAFT CHARGES

. “Fees Rather Unfair” (N.Z. Press Association) WELLINGTON, Sept. 15. “It is wrong for people to make money out of the right to create credit—that should belong exclusively to the Crown,” said the Leader of the Opposition (Mr Nash) in the House of Representatives today. Mr Nash criticised the action of the five trading banks in introducing an overdraft servicing fee at the beginning of November. The banks claim the fee is necessary to cover some of the costs involved in servicing advances. Mr Nash said bank rates were subjected to some control by the Reserve Bank which, in turn, was subject to the Minister of Finance, but the charge, in his opinion, was a way of charging more for an overdraft. Below £3OO a person was being charged another 1 per cent., but for an overdraft of £lO,OOO the extra was only .1 per cent. “That is ratter unfair for the smaller overdraft holder. It matters nothing to pay £5O if you have an oveidraft of £50.000. This ensures a greater profit to the banks on the making of overdrafts,” said Mr Nash.

“Increased prices become inevitable at once. It is the Government that should recover any benefits outside the cost of the service. These benefits should go to the State because the State is the body that collects from the people, and tries to find in equity what Sums are required for the running of the country.” said Mr Nash. Mr P. B. Allen (Government, Bay of Plenty) said that, in the main, the matter was a deal between the bank managers and their clients. It was a small and trifling matter.