MPs have today added to calls to urgently review overdraft charges, placing a cap on the amount lenders can levy if needs be.
Rachel Reeves, the Labour MP who brought this morning's Westminster Hall debate, described some of the current levels of overdraft charges as "disproportionate with the offence you have committed", adding: "I don't want to deny the banks to charge for the services they provide but I do want some fairness and proportionality."
Reeves, who is a member of the influential Treasury Select Committee, also slammed last year's report by the Competition and Markets Authority (CMA) into the retail banking sector as a "missed opportunity", with remedies on overdraft charges which fell "short of the mark".
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The Labour MP criticised the CMA for "passing the buck to the Financial Conduct Authority (FCA)". The City watchdog currently has an open consultation on high-cost short-term credit products, which will include a closer look at overdraft charges and is open until next Wednesday.
City minister Simon Kirby noted he wanted to "wait and see what the FCA came up with later in the year", but added the government was committed to making the UK's banking system the most "competitive, innovative and also fair in the world".
Just this morning, consumer interest group Which? released figures revealing some overdraft charges levied by high street banks were as much as seven-and-a-half times the amount payday lenders are allowed to charge.
Responding to the comments aimed at its report, a CMA spokesperson said:
We have recommended a technological overhaul to make it easier for customers to manage their money, find the best deal for their needs and avoid overdraft charges...We have recommended the FCA do further work in this area to follow through on our findings and remedies.