The government has threatened Bermuda’s banks to rein in escalating bank fees and globally-abnormal bank charges, or face government-imposed limits.

And a near 10 year old Progressive Labour Party promise to crack down on banks is a step closer to reality, with the tabling of legislation in Parliament.

David Burt, the Premier and Minister of Finance, has introduced the Banks and Deposit Companies Amendment Act 2022 to provide the Bermuda Monetary Authority the power to impose codes of conduct on how institutions conduct deposit-taking business.

If passed, the new laws will allow for the regulation of banking fees, similar to provisions that exist in other major countries.

But the Premier said there is also an important provision to enhance consumer protection.

He said Bermudians had experienced banks increasing fees at a moment’s notice, with no recourse.

He told his legislative colleagues: “Such decisions by our local financial institutions have contributed to the cost of living in this country.”

He said banks continue to improve their bottom lines at the expense of the people.

The premier quoted himself from a 2013 Budget Speech reply: “Certain fees at local banks punish and compound distress for those in financial difficulty.

“One key issue is credit card over-the-limit fees which is difficult for the average customer to grasp, given credit cards have “limits”.

“However, Bermuda banks allow customers to exceed their limit and then charge a fee every time they do, with fees sometimes far exceeding the transactions that triggered the fees.

“This punitive practice has been addressed in many jurisdictions with regulations restricting a bank to one over-the-limit charge per billing cycle.”

In 2013, Mr Burt called on the then finance minister to put an immediate end to the practice.

But now, since it has not been addressed – and not adopted universally by the banking community – his government will take the action the electorate demands.

He also said some local banking fees have increased by 400 per cent over the last three years alone, which drains the purchasing power of Bermudians, as more of their hard earned money goes to banking fees.

The premier said: “I understand that banks globally have resorted to fee income to supplement declining interest income while global interest rates were at historically low levels.

“But as interest rates increase, it is imperative of the government to act to protect consumers.”

He said he has taken these issues to the Bermuda Bankers Association and hopes that they will collectively address the escalating fees and also address the charges that are outside of global norms.

But he had an ultimatum.

“If they will not act,” the Premier warned, “then this government will act in the interest of consumers in Bermuda by introducing limits on banking fees to ensure fair access to banking services.

“Bermuda’s residents deserve no less than fair access to banking services and they should not be disadvantaged by punitive fees when compared to residents in other jurisdictions.”

In discussing the Bill before the House of Assembly, he said: “This legislation will allow the authority to ensure banking institutions are appropriately complying with consumer protection requirements and promoting better and fairer treatment of their customers.

“Conduct matters in relation to financial institutions have been the subject of numerous discussions throughout the community.

“The changes proposed in this Bill are seen as a positive enhancement to the powers available to the authority and the minister, to ensure that matters relating to the protection of customers are given appropriate consideration by entities in this sector.”