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Bank Fees and YOU!

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The following was submitted by a member of the BU family who requested to not mention their name – David, blogmaster

“Rather than justice for all, we are evolving into a system of justice for those who can afford it. We have banks that are not only too big to fail, but too big to be held accountable.”  – Joseph E. Stiglitz

Recently I received a statement from the Bank with charges deducted, exceeding far more than the interest deposited. I do not recall receiving notice that changes were being made. This account was rarely used, only to update when necessary.

Speaking to friends and neighbours re: same, I found this puzzling that money deposited for a “Rainy Day” is being siphoned off in the dead of the night. Some affected are pensioners who are considered members of a vulnerable segment of society. When the bank was asked to explain, here are a few of the explanations given by staff members:

  1. A pensioners with a Barbados pension is exempted once they submit the necessary certified form.
  2. We are following a directive from senior management.
  3. A message to the effect to take your business somewhere else.

Are Bajans now having to pay for the misdeeds of previous governments? Why has the government through its agent the Central Bank of Barbados allowed banks to charge high rates for borrowing and pay ridiculously low interest to customers with added fees to inflate charges to ordinary bank accounts. Is the Central Bank interested at all in curbing the excessive behaviour by banks in Barbados? Should ordinary Barbadians accept what we are told and do nothing about it?

What do our brothers and sisters think about this money grab known through the ages as greed?

Here is my opinion on the matter:

The Banks are using OUR money to lend US our own money and have the audacity to charge us high fees while using our hard own money. Are our relatives living in other jurisdictions aware of this rip-off?

For as long as I have become aware Barbadians have been encouraged to set aside a percentage of earnings to guard for a rainy day. This was always praised by successive governments as a worthy behaviour. Today we now see a transformation of what is expected. To compound the problem for ordinary Barbadians, investing in government bonds is not an option given current challenges. Also tax breaks given to both ordinary and middleclass were removed.

What are ordinary Barbadians to do now if they want to plan good lives for themselves and family?

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113 responses to “Bank Fees and YOU!”

  1. David Avatar
    David

    @Dr. Lucas

    John A is incorrect about the FIs buying the same bonds as individuals in his scenario. Banks buy treasury bills/notes/debentures. Individuals buy savings bonds.

  2. Vincent Codrington Avatar
    Vincent Codrington

    @ David BU at 3 :59 PM

    John A is right. Individuals do buy Treasury Bills, Treasury Notes, Debentures and Savings Bonds. You have been saying this for months now. I was hoping somebody else would have corrected you.

    With Savings Bond the purchaser collects his interest payments up front. He pays in less than the face value of the Savings Bond.

  3. Vincent Codrington Avatar
    Vincent Codrington

    @ Hal Austin at 3:34 PM

    Do not despair. All the systems for regulation are in place. For one reason or other they are not functioning as we would like.
    We need to get to the bottom of system failure in small societies such as ours.

  4. Hal Austin Avatar
    Hal Austin

    @ Northern Observer,

    What is bank regulation in Barbados got to do with the UK? Plse explain.

  5. John A Avatar
    John A

    @ Vincent

    I was just about to type a reply and you did it for me. Thanks

    @david

    Don’t get tie up in the superficial look deeper at the fallout and cost to us today.

    I wouldnt say the banks are getting revenge, i would say they were forced into a situation where massive loses of revenue were forced on them and they have tried to recapture some it on we the customers.

    We have to also say our regulators failed us miserably here. That is why I have asked what has changed as we are now asking the same “system” to now police new trading concepts that technology has brought to us.

  6. Hal Austin Avatar
    Hal Austin

    @ Vincent

    Having the structures and not delivering is failure.

  7. David Avatar
    David

    @John A

    The comment referred to what you stated about banks forced to buy bonds. A misunderstanding it looks like.

  8. Vincent Codrington Avatar
    Vincent Codrington

    @ John A at 4:36 PM

    I share your concerns about our ability to regulate and monitor the fintech industry. More importantly that industry is committed to eliminate regulators and to engage in peer to peer trading transactions. This is good; but what happens when it is abused and there is a systemic failure of the financial system.

  9. John A Avatar
    John A

    @ Vincent.

    The biggest concerns to me based on my post of 3.36pm are these.

    We clearly are poor in regulation in most things, be it the banking sector or supervision of insurance companies. The printmasters did as they liked and yes I blame Worrell too for not resigning and then calling a press conference to tell the nation why. I digress forgive me, the things is at no point in the system was the MOF challenged by any independent oversight body or forced to stop. In my view any system that has no fail safe switch is not worthy of adoption.

    My second major concern is since that incident what has changed in the system to ensure greater oversight now exist?

    We are also now talking about introducing digital currency into the banking system, is the oversight going to be there to police this?

    Have you heard anyone from governments side come out and discuss this issue? Has anyone said what value in digital currency they feel would be a safe amount to allow into the system given the circulation of the Bds dollar today?

    Have they stated what insurance or level of underwrite they plan to insist that those offering these services will be asked to carry?

    My point is I as you know support technology and progress, but I can’t help looking back at the madness that was allowed to happen and asking what has changed in terms of supervision going forward taking everything into consideration?.

    To qoute Hal where is the regulator and why isn’t he or she telling us the nitty gritty of the details, as oppose to just presenting window dressing and broad statements like “creating a sandbox for digital currency to play in”.

    Someone please tell me what the hell that mean in English when it comes to implementation and oversight!

  10. NorthernObserver Avatar
    NorthernObserver

    @VC
    “You do seem to have a low opinion of Bajans,do you not? Let me assure you that every one who can afford a bank account is literate and numerate.”
    It is not about Bajans, rather people. One cannot assume financial literacy. A few years back, when my youngest was in University, a “problem” with her Bank forced her to give me access to her account. I noted an $18/mth service fee, which is waived to Uni students. When I asked her about it, she tells me “well everybody else (all 6 in her adode) pay the same fees.” !!! The refund was 6 x 28months x $18. Having volunteered at a credit counselling service for nearly 10 years now, I see people weekly who get charged fees but are “afraid to ask” what they are for. [apparently some feel that asking questions makes them stupid or they may get ‘cut off’] A favourite is “balance protection” fees, a common credit charge charge, which is a rip-off, many think they understand, until they try to use it. 90% do not understand how and when credit card interest is calculated. Several ‘think’ by paying the minimum balance means they get charged no interest.
    This year, I had a number whose car insurance rates doubled. Why? The insurance firms were telling their brokers to up the minimum liability coverages from $1 million (that required by law) to $2-3 million. Was this to protect these people with few assets living week to week, or to protect the insurers?
    I no longer ask questions… “do you understand”, rather my query is “ok, please explain to me” and a response of “it is exactly how you explained it to me” is not allowed.
    I appreciate your assurances. And continue to hope for the best for all Barbadians.

  11. Vincent Codrington Avatar
    Vincent Codrington

    @ David BU at 4 :56 PM

    If the CBB changes the reserve ratio of GoB paper to deposits , is “forced” an incorrect description?

  12. NorthernObserver Avatar
    NorthernObserver

    @HA
    “Ordinary people should take their money out of the Canadian and Trinidadian banks” [Quote]
    I was wondering if British Banks would be better?

  13. David Avatar
    David

    @Vincent

    Why would the central bank increase the reserve? These are things average people do not understand.

  14. WURA-WAR-on-U Avatar
    WURA-WAR-on-U

    “The refund was 6 x 28months x $18.”

    always par for the course for Uni students, they are soft targets, but in Canada, when they have skimmed enough and after a period of time, the banks do refund the students….though it should not happen at all.

  15. John A Avatar
    John A

    @ Robert Lucas

    As simple as it is stated I can assure you some will still try to distort the facts either for their personal or political purposes.

    I just felt it had to be said as people ask ” why government don’t do something about this?” They of course don’t realise it is in fact government who created the problem in the first place!

  16. NorthernObserver Avatar
    NorthernObserver

    @WARU
    the best part on that issue was they were in Kingston, which apart from Prisons, is a University/College town with multiple educational institutions. How any Bank employee with a client between 18-24 with an out-of-town home address is NOT a student, was beyond me. But the computer default was “not a student” and employees were trained NOT TO ASK.

  17. William Skinner Avatar
    William Skinner

    This is only the beginning of massive confusion to follow as we grapple with outdated solutions. We believe that protecting a currency is the beginning and ending of fiscal/ monetary good governance.
    It is an essential element but not the only element. I once visited a house and was told that the fridge was loaded. The only problem was that the fridge was locked almost for the entire day and no child in that house could get a block of ice farless a glass of juice or milk until it was unlocked later in the evening!
    The banks are doing as they please because there are allowed to. We are now confronting over forty years of perverse stupidity by the decadent duopoly. No amount of sugar coating and feel good analysis is going to solve the problem.
    Successive governments refused to give the credit unions full commercial banking status. Going back to to the eighties, when it was thought they were expanding too fast. They have never recovered. The credit unions and cooperatives remain the best vehicles to empower blacks but the political class is in bed with the international banks. Once more the visionless duopoly has failed the people.

    More to come.

    Duopoly Rules

  18. Vincent Codrington Avatar
    Vincent Codrington

    @ David BU at 5 :07 PM

    Changing the reserve ratio is one of the policy tools that a Central Bank uses to increase or decrease the money supply.
    In the case under discussion ,the banks were liquid and did not lend to the business sector and the public sector was starved for funds . The trade off was explained by John A.
    GoB paper, up to that point, were low risk and the banks quite happily lent to GoB rather than grant high risk loans to businesses.
    You may also have noticed banks increased Credit Card loans and consumer loans. High profits and high risks loans.
    In short Commercial Banks are set profit targets by Head Offices and they do what is necessary to meet these targets,including imposing ledger fees.

  19. John A Avatar
    John A

    @Robert Lucas

    Remember too the loss I outlined the banks took is only based on their drop in interest rate from the debt restructuring on the paper they held. If you then take into account the additional lost in future revenue based on the lost in liquidity from their customers from the said debt resturcturing, the figure starts to grow quickly. Many of their clients now being down on their own income from the above, may now have problems servicing old loans far less being now able to enter into new ones.

    Again this will result in further losses to banks which I have not included in the initial figures as I have no way of quantifying them.

  20. David Avatar
    David

    @Vincent

    The blogmaster’s recalls Sinckler on the floor of parliament saying that banks were not buying government paper. Also was the change to the reserves done when Barbados credit rating was almost junk or junk?

  21. Vincent Codrington Avatar
    Vincent Codrington

    @ David BU at 5:54 PM

    I do not know what you and Miller trying to involve me in. But I will not be drawn into any discussion of persons. I think I have given my views on the issues of credit ratings, the increase of the reserve ratios of the commercial banks and the imposition of ledger fees.
    In view of recent happenings, do you not think the banks made a rational decision?

  22. WURA-WAR-on-U Avatar
    WURA-WAR-on-U

    “The credit unions and cooperatives remain the best vehicles to empower blacks but the political class is in bed with the international banks. Once more the visionless duopoly has failed the people.”

    ah…but for how long.

  23. David Avatar
    David

    @Vincent

    Are you saying the banks had the choice to comply with the increase in reserve requirement? Forgive the blogmaster if you are being misunderstood.

  24. WURA-WAR-on-U Avatar
    WURA-WAR-on-U

    NO..the system will never change it’s own status from SHIT…the dumb humans who designed the flawed system would have to, but the attitude is, it ain’t broke…sooooo..

  25. David Avatar
    David

    @Vincent

    Here is an extract from John A’s earlier comment that was questioned.

    Well you remember when the goodly governor of the central bank removed the minimum saving rate? It was done to force people to buy the worthless government bonds. The same bonds that the commercial banks were then forced to buy as the market didn’t want them. The same bonds that ended up yielding little in the restructuring and hence have now come full circle to bite us in our ass today, as the banks try to make up lost revenue.

  26. Donna Avatar
    Donna

    SirSimpleSimonPresidentForLife June 13, 2019 3:13 PM

    @Donna at 9:09 a.m.

    I’ve stored my money in my children’s heads.

    Is that a good place to put it?

    +++++++++++++++++++++++++++++++++

    Right now it sure is better than the bank.

  27. John A Avatar
    John A

    David the word people if you check it is a broad reference to the public. The public can be made up of individual persons or corporations or governments as they are all collections of ” people ” regardless of trying to categorise it. Vincent already explained the facts to you are you hoping they changed?

    I only replied to you as your futile attempt to drag Vincent into petty political knit picking may of driven him to catch his ZR.

    Can we for once discuss the issues without being either political or petty?

  28. Donna Avatar
    Donna

    This is not exactly the fault of the banks but I have noticed a recent trend where employers are demanding that all employees open an account at the same bank which they use in order to get paid. Some employees who work for less than a thousand dollars a month are being forced to do this and bear the loss of these fees. Should an employer not pay an employee in a manner that best suits the employee, within reason? Why would they refuse to send the employees funds to a credit union if the employee so desires?

  29. David Avatar
    David

    It is not petty. The average man (people) does not buy government paper like companies and FIs do. The clarification is useful.

  30. John A Avatar
    John A

    People in that context really is used so as not to close off any segment from participation. For instance you would hear a broker say something like ” people can buy free of penalty” when maybe discussing an upcoming public offering.

  31. Vincent Codrington Avatar
    Vincent Codrington

    @ David BU at 7:15 PM
    On the contrary the average person used to invest in GoB paper. That is where their gratuities go. That is where their separation packages go. There used to be a tax saving clause if separation packages were invested in GoB paper. This was evidenced when bond holders were faced with another Hobson’s choice. These were persons with average incomes and pensions.that filled the Grand Salle. Our culture is one of savings for emergencies and for educating our children.

  32. John A Avatar
    John A

    @ Vincent.

    In the debt rescheduling locally do you know if government have the right to roll over the paper close to maturity should the need arise?

  33. Vincent Codrington Avatar
    Vincent Codrington

    @ John A at 8 : 35 PM

    I do not have my documents at hand. But from memory the bonds are being retired in equal installments,over an extended period at a very low rate of interest. I will review this tomorrow.

  34. David Avatar
    David

    @Vincent

    Is there not a separation between ‘ordinary’ people purchasing government paper to avoid the cash penalty and doing it voluntarily? We have both shared a position, we can move on.

  35. Vincent Codrington Avatar
    Vincent Codrington

    Do bear in mind that the individual bond holders modal age was about 65 years.Life expectancy is late 70s for men.

  36. John A Avatar
    John A

    @ Vincent.

    Thanks I would appreciate knowing. I asked 2 people in the system but neither were sure if there was a right to roll over clause in the agreement.

  37. John A Avatar
    John A

    @ Vincent

    Late 70s for men but if they got a miserable wife it could be late 60s too. Lol

  38. SirSimpleSimonPresidentForLife Avatar
    SirSimpleSimonPresidentForLife

    What if the “miserable wife” nudges you to take care of your health?

    While the happy, sweet wife ignores your self destructive behaviour?

  39. robert lucas Avatar
    robert lucas

    @ David June 13, 2019 3:59 PM

    Noted. The gist of john A’s comments are spot on.

  40. WURA-War-on-U Avatar
    WURA-War-on-U

    Well let’s hope president Mia with her delusional self understands that is all she is ……DELUSIONAL…

    Not living in reality got both CORRUPT governments to BRING THE ISLAND TO ITS KNEES…and the majority citizens surrounded by poverty.

    https://barbadostoday.bb/2019/06/13/weeded-out/

  41. WURA-War-on-U Avatar
    WURA-War-on-U

    Tiefing criminals…always taking advantage of the majority black population..

    http://www.nationnews.com/nationnews/news/240259/-baico-workers-tell-kpmg-monies

  42. WURA-War-in-U Avatar
    WURA-War-in-U

    This is what happens when you are delusional, although some of what this Canadian professor is saying is pure SHITE…some of what he said is on point….take note that these demons always have an ulterior mitive, so you weed out the truth from among their lies.

    “Just in case you wanted to start growing it here, you know, if you think that ‘we are going to grow Barbados marijuana and we are going to make a fortune and the revenue is going to be great’… Well, to grow marijuana makes no difference if they are growing it in the Arctic or in Barbados, you are not going to be growing it outdoors. It has to be grown in a controlled environment,” said Francescutti.

    “And a controlled environment is going to require certain amount of humidity, a lot of electricity and a lot of water. Water woes continue. So I don’t know if you are the right place to start growing marijuana to try and compete with countries that are so far ahead of you. In Canada the operations are unbelievable. I don’t think an island like Barbados could compete at any level,” he said

  43. Hal Austin Avatar
    Hal Austin

    @ Northern Observer

    Are there British banks in Barbados? Name them.

  44. SirSimpleSimonPresidentForLife Avatar
    SirSimpleSimonPresidentForLife

    How much does Dr. Francessuti know about tropical agriculture?

  45. Vincent Codrington Avatar
    Vincent Codrington

    @ John A at 8:35 PM yesterday

    I have no specific information re the current restructured local debt of G0B. The old practice was for the agent of the GoB to ask bond holders to purchase subsequent issues of debentures, Or the debenture holder would make the request to reinvest in other available GoB debentures. As far as I am aware G o B has no right to roll over the debts owed to private citizens.

  46. Vincent Codrington Avatar
    Vincent Codrington

    @ John A

    There are enough conventional policy levers for GoB to correct what situations you envisage may arise .

  47. John A Avatar
    John A

    @ Vincent

    Must appreciated that should at least lend some comfort to the afflicted.

    Have you seen the online petition being circulated requesting a meeting with the PM to review the increased land tax bills? It apparently has over 500 signatures and growing fast!

  48. John A Avatar
    John A

    @ Vincent

    The online petition is on change.org under the heading

    Barbados land tax make it affordable.

    Some people made up of a cross section of home owners, businesses etc, posted it today and they are aiming for 1000 signatures at which point they will be seeking a meeting with the PM. Apparently they already passed 500 signatures and growing.

    interesting times ahead on this issue for sure. I think government went too far on this issue and the push back is going to be heavy.

    Notice how quiet the unions are on this issue?.

  49. FearPlay Avatar
    FearPlay

    Stop all the old talk and take some action. Here is your chance to be a part.of change. https://www.change.org/p/the-honorable-mia-amor-mottley-prime-minister-of-barbados-and-minister-of-finance-reform-the-barbados-land-tax-to-make-it-equitable-and-affordable-for-all-property-owners?recruiter=971697589&utm_source=share_petition&utm_medium=abi_gmail&utm_campaign=address_book&utm_term=psf_combo_share_message&recruited_by_id=33d840f0-8ec6-11e9-9c68-d9120bc3e1e2

  50. John A Avatar
    John A

    @ fearplay

    Yes that is the one I was sent by a friend earlier today. It was a good move to take it to this format for circulation. Sometimes technology can be used for good instead of just idle gossip.

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