Bank Of Mexico Extends Bank Commission Restrictions To ATMs
October 13 2009 - 9:04AM
Dow Jones News
The Bank of Mexico said it's placing new restrictions on the ATM
fees commercial banks charge consumers in its latest move to limit
bank commissions.
As of Jan. 15, banks will have to inform clients who withdraw
money or check their account balances through an ATM of the fees
they will be assessed prior to authorizing the transaction, the
Bank of Mexico said in a release Monday.
In the case of ATM transactions involving two different banks,
the central bank said that as of April 30 banks will no longer be
able to charge consumers two fees, one by the ATM operator and the
other by the card issuer.
"Under the rules that have been issued only one of the two banks
will charge the commission for those operations," the Bank of
Mexico said.
The Bank of Mexico in recent months has sought to rein in
commissions with a view to boost competition in the banking
industry by giving banks a greater incentive to generate revenue
from lending rather than passively collecting commission and fee
income.
Under rules that took effect in August, the central bank banned
several commissions, including those on accounts required as a
condition for a bank granting a loan, overdrawing or attempting to
overdraw on a debit card, and for closing a deposit account.
Fees and commissions account for a significant portion of the
profits generated by Mexican banks, and represented 27% of their
operating profits last year.
The central bank's actions follow years of public outrage over
the perception that the country's mostly foreign-owned banks charge
Mexican consumers higher fees and interest rates than they do in
their home countries.
Legislation that would have given the central bank greater
authority to regulate bank commissions and interest rates was
nearly passed by Congress earlier this year, but failed to come to
a vote in the lower house prior to the close of the legislative
session in April.
Banks are an easy political target given that foreign investors
own five of the top seven institutions.
Together, Banco Bilbao Vizcaya Argentaria SA (BBV) and Banco
Santander SA (STD) of Spain, Citigroup Inc. (C) of the U.S., HSBC
Holdings PLC (HBC), and Bank of Nova Scotia (BNS) control 68% of
total bank loans, according to government data.
-By Ken Parks, Dow Jones Newswires; 52-55-5001-5723;
ken.parks@dowjones.com