‘Doesn’t seem fair’: Cabinet Minister tells CommBank to scrap $3 withdrawal fees

The Albanese government has slammed a bank’s decision to charge customers a fee to withdraw money from their own accounts, claiming it “doesn’t seem fair”.

A key government frontbencher has taken a swipe at Commonwealth Bank over its decision to slug thousands of customers with $3 cash withdrawal fees for banking at a branch, post office or over the phone.

Australia’s biggest bank announced the unpopular move on Monday to backlash from customers and all sectors.

On Wednesday, Housing and Homelessness Minister Clare O’Neil said the change was not fair or timely.

“I just think the government feels this is really unfair to customers, to Australians, especially just before Christmas,” she told Sunrise.

The new fee does not apply to ATM withdrawals.

Clare O'Neil says CommBank should reconsider the changes. Picture: NewsWire / Martin Ollman

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

The move “doesn’t seem fair or appropriate” given the bank had posted “huge profits” during a period when most Australians were struggling, she said.

“Come on, guys. It’s Christmas. We don’t need this right now.”

“This is not something the bank should be doing and we’re asking them to reconsider.”

Commonwealth Bank told customers this week it would close its Complete Access Account and move customers to its Smart Access Account.

From January 6 the new account will include a $3 fee on every withdrawal at a branch, a post office or by phone.

Commonwealth Bank shares are at a record high, and the largest bank in the country has out customers onto accounts with withdrawal fees which are higher than the other big four banks. Picture: NewsWire / Luis Enrique Ascui

These will be void if customers are under the age of 18 or are reliant on over-the-counter services because of a disability.

Customers can still get cash without copping the fee from CommBank ATMs.

“Our Smart Access account has a $3 assisted withdrawal fee. This is our main transaction account and the assisted withdrawal fees on that account have not changed,” the bank said in a statement.

“We continue to offer waivers on assisted withdrawal fees for customers who meet certain criteria, including certain types of pension recipients and those under 18 years of age.”

Queensland Liberal Party MP Ted O’Brien said older people in particular in his regional electorate would be hard hit.

Swinburne Adjunct Professor and financial services expert Steve Worthington said the move was “very cheeky”, “not required” and also risked “excluding some people from participating in our society”.

Banks’ central focus was their profitability, or cost/income ratio, he said.

“The easiest thing to influence is the cost, actually, and that can be both people and premises,” he told ABC on Wednesday morning.

“What we’ve seen in the recent years is a decline in the number of branches and some branches don’t even have cash on the premises.”

Commonwealth Bank chief executive Matt Comyn was was paid $10.4m last year. Picture: NewsWire / Martin Ollman

Bank branch hours and the number of ATMs have been falling too. The banks also have cash transit expenses, as the biggest player in that area, Armaguard, is running at a loss.

“The banks are trying to reduce their costs and this is why we’ve gone down this particular track of charging for this particular service,” Professor Worthington said.

The Professor described charging withdrawal fees as “very cheeky”.

“It’s something that I think is really not required and I think there will be a lot of pressure on the CBA to take that back.”

Commonwealth Bank is “by far” the biggest of the big 4 banks, he said.

“If we let CBA get away with it, everyone else will be doing something similar.”

The overarching principle behind the move was likely to get people to bank digitally, he said.

“But of course as we’ve discovered before there are plenty of people who actually rely heavily on cash. People in rural areas, people who are just ‘hard up’ as it were.

“I think, it’s not scandalous, but certainly I can see how it drives profit margin. But at the same time I think it disadvantages many people and we’re in danger of excluding some people from participating in our society.”