The Rudd government is looking into the Mortgage Exit fees being charged by banks in an effort to bring down unreasonable charges.
As part of the moves ASIC will outline a new fee structure for banks to stop them charging what are perceived to be excessive mortgage exit fees. Some banks charge as much as $1000 for exisiting a variable rate mortgage.
Banks that continue to charge excessive fees will be prosecuted under new consumer credit laws due to take effect from July 1.
It follows a class action announced last week against banks over other fees that has attracted thousands of bank customers eager to solicit damages from the case.
The Sunday Mail believes the new exit fee regime will allow banks to charge only what it costs them when a loan is paid out or face prosecution for having an unfair contract.
Treasurer Wayne Swan is also understood to have requested a review of the powers of the Australian Competition and Consumer Commission in relation to banks.
The review is designed to take steps to ensure the competition watchdog has all the powers it needs to control anti-competitive practices between the banks. There is concern by the government that the current environment is not conducive to competition by the smaller banks.
The Government would like to ensure that the banking system is working effectively for the Australian families rather than. Mr Swan promised to do something to make it easier to switch mortgages two years ago and has faced criticism from consumer group Choice for failing to act.