CBA caves in to pressure over plan to charge $3 for branch withdrawals

Commonwealth Bank has caved in to public and political pressure and paused a controversial move that would have led to about 50,000 extra customers paying a $3 fee to withdraw cash from branches early in the new year.

The country’s biggest bank faced intense backlash, and its chief executive Matt Comyn fielded a call from Treasurer Jim Chalmers on Wednesday morning, after announcing it would close one million Complete Access accounts and move those customers into its main transaction product, Smart Access.

The Smart Access product includes $3 fee for an “assisted withdrawal”, such as those occurring through a branch or via telephone banking.

CBA has not dropped the fee but said it would talk to up to 50,000 customers who regularly access cash via “assisted withdrawal”, and who would be between $5 and $15 worse off per year under the flagged changes.

“We’ve done a poor job of communicating aspects of this change for our customers. We know that account changes are difficult, and especially at this time of the year, and a challenge with cost-of-living pressures, we’ve decided to announce a change in our approach,” CBA head of retail Angus Sullivan said at a snap media conference at midday.

“[For customers] who will be worse off, and need more support in making sure they’re making arrangements that are appropriate, we’re going to pause the changes that we announced, and we’re going to spend the next six months individually engaging with each of those customers to make sure that we have a solution tailored for each one of them.”

Sullivan’s mea culpa came hours after a conga line of politicians, led by Assistant Treasurer Stephen Jones on Tuesday night and including Finance Minister Katy Gallagher and Opposition Leader Peter Dutton, slammed the move as “unfair”, “pretty extraordinary” and “greedy”.

While Sullivan denied there was federal intervention, Chalmers told a press conference held about the same time that he had spoken to Comyn about the “unacceptable” changes that he said affected vulnerable people.

But Chalmers refused to put a number on what an acceptable fee would be for withdrawing cash, which is becoming increasingly expensive for banks to handle.

“They accept that those changes were not acceptable or appropriate,” he said. “I welcome their change of heart ... They will have another look at those changes to make sure that people are not worse off.”

Gallagher told Nine’s Today show on Wednesday morning people were “sick of” banks charging fees to customers accessing their own money. While Housing Minister Clare O’Neil told Seven’s Sunrise the move was “really unfair to customers”.

“Everyone’s had a bit of a tough year on the cost-of-living front and the last thing they need is a kick in the guts from the Commonwealth Bank right before Christmas,” she said.

On the same program, Liberal senator Jane Hume pledged to shut down her CBA account.

“I don’t know what kind of greedy, out-of-touch executive decided on this idea. It’s ridiculous and customers will speak with their feet,” she said.

The Greens vowed to seek to legislate against banks charging exorbitant fees for withdrawing cash.

CBA has been attempting to shut down its legacy Complete Access transaction account, which it has not offered since 2016. Sullivan said with 90 per cent of those customers not withdrawing money over the counter, and Smart Access accounts – with nine million users – being $2 cheaper per month, the bank believed it was the right time to make that transition.

The fee does not apply for ATM withdrawals, and there are exemptions for people under the age of 18, as well as pension and other concession-card holders.

Sullivan said customers adversely affected will be offered other accounts, such as Basic and Pensioner Security, but the bank was willing to work with people to cater to their individual circumstances.

He denied the changes were motivated by profit, saying the vast majority of people would either be financially better off or neutral, but reiterated the cost of handling cash.

“More than 90 per cent [of customers] do not use over-the-counter cash services,” Sullivan said.

Credit: Matt Golding

“They’re very happy using the ATM or paying digitally, which is a choice for everyone to make ... The reality is those other payment methods are a cheaper service for us to provide, and so we are ensuring that we can offer competitive service to those customers who choose to bank that way and recover a fraction of the cost of providing the more expensive service.”

Cash usage has plummeted over the years, and the cost of handling and transporting physical currency is getting more expensive for financial institutions and businesses. Cash-in-transit service provider Armaguard collapsed earlier this year amid the decline of cash, requiring an eleventh-hour bailout from big banks and supermarkets.

The federal government has been developing plans to ensure cash remains part of the payment system, and last month Chalmers announced businesses would be required to accept cash for essentials such as groceries and fuel.

National Australia Bank said it did not charge fees for assisted withdrawals, while Westpac said it didn’t charge the fees for retail bank customers.

ANZ Bank applies a $2.50 fee for staff-assisted withdrawals for some products including certain savings accounts, but its everyday transaction account does not incur the fee.

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