The Greens have called for a two-year ban on banks lifting their home loan interest rates beyond Reserve Bank movements.
Greens leader Bob Brown challenged the government and opposition to get on board and to back their rhetoric against the banks with action.
But the government is preparing its own response while the opposition says what the Greens propose would amount to bank re-regulation.
Australia’s big four banks have been under siege for lifting their variable home home loan interest rates beyond the 25 basis point rise in the Reserve Bank’s official rate move on November 2.
The Commonwealth Bank started that with a 45 point rise on the same afternoon as the official rise. By last Friday the other three had followed, all by more than the official rise but less than CBA.
Senator Brown said he understood the government would soon have legislation before the parliament to give the Australian Competition and Consumer Commission (ACCC) greater powers over the banks.
He said the Greens would seek to amend the government bill or introduce its own legislation to impose a 24-month lid on bank interest rate increases.
“We think they should be prevented from going beyond the Reserve Bank increases in the coming 24-months,” he said.
“If the Reserve Bank puts the interest rates down, they should be required to go at least as far down.”
Senator Brown said taxpayers had backed the banks through the recession with government guarantees and they were now reporting huge profits.
“It’s time they gave something back to the average Australian,” he said.
The Greens are also planning to introduce legislation to the House of Representatives to ban the $2 fee banks charge non-customers for use of their ATMs.
A spokesman for shadow treasurer Joe Hockey said what Senator Brown was proposing on interest rates effectively amounted to re-regulation of the banks.
“This is not and never will be coalition policy,” he said.
“We would be more than willing to support measures that increase competition in the banking sector and that’s what the nine-point plan put forward by the coalition would do.
“And we’d be encouraging the Greens and the other independents and the Labor Party to support our private members bull to give the ACCC (Australian Competition and Consumer Commission) further powers to crack down on price signalling.”
Treasurer Wayne Swan said the ANZ, Westpac and NAB rate rises last week confirmed their culture of arrogance and contempt for the community.
Mr Swan said the Australian Securities and Investments Commission had released new rules, showing how it would enforce the crackdown on banks which sought to profit from mortgage exit fees or gouge customers.
“We know there is still more work to do to build up competition in the banking sector,” he said in his weekly economic note.
“I’ll soon be announcing a carefully considered, effective plan to promote more competition and give people a fair go. The banks shouldn’t mistake our methodical approach for a lack of determination to do even more to make the banking system work for Australians.
“It’s critical we get these reforms right so they are effective and enduring.”