The crisis in regional banking services continues to intensify, with three towns set to lose NAB branches this Thursday, 2 February: Warners Bay NSW, Tin Can Bay Qld, and Strathalbyn SA.
For Tin Can Bay it’s the last bank in town.
Twenty-five more towns are on notice they will lose banks between now and May, which is on top of the 15 regional branches that closed in December, which were on top of the 36 branches that have closed since 30 September last year.
All in all, since that date—when Financial Services Minister Stephen Jones published the report of the Regional Banking Taskforce stacked by bankers who gave themselves the green light to accelerate branch closures—the banks have shut or given notice to shut 79 branches in regional Australia.
This mass-withdrawal of banking services from regional Australia is a genuine crisis, which is why Parliament must act—now!—including by:
- Declaring an immediate moratorium on further branch closures;
- Establishing an urgent Senate Rural and Regional Affairs and Transport Committee inquiry into the regional banking crisis, as called for by independent journalist Dale Webster and banking expert Martin North last November.
Fight like Junee!
The Junee Shire in NSW is leading the fightback against the banks, by taking on CBA over its decision to close the only bank in town, scheduled for 3 March.
Click here to watch Channel 9’s Today Show interview with angry Junee residents on 31 January: Junee fights back against CBA closing its only bank branch!
Click here to read AAP’s coverage today (31 Jan.): Towns putting up a fight as banks close
Junee is a growing town of more than 6,500 people, serving a productive region and boasting dynamic local businesses like Junee Licorice and Chocolate, which is a major tourist attraction. Junee Shire Council rejects CBA’s excuse for closing the branch, and has made an official complaint to the Australian Financial Complaints Authority (AFCA). The Council has also written to other Councils with towns losing bank branches, to unite against the banks’ branch-closing agenda.
The fact that Junee is fighting so hard proves, by definition, that the banks are lying when they claim that they are only closing branches because people are moving away from face-to-face banking, and they are responding to that shift in demand.
If that were true, the communities they are abandoning wouldn’t be so angry at losing their banking services.
NAB, which is closing the three branches this week, has let the cat out of the bag by providing so-called “fact sheets” to justify closing their branches, which claim that the majority of customers are registered for online banking, and that customer visits to the branches have plunged.
However, the fact sheets also show that while around 90 per cent of customers are registered for online banking, only around a quarter of those are regular users (NAB defines regular users as 3+ times a year).
On top of that, the fact sheets deliberately exaggerate the drop in customers visits by comparing 2019 to 2020 and 2021—the years of COVID lockdowns when customer visits plunged everywhere!
For months Dale Webster’s Twitter account @TheRegional_au has been dedicated to quoting submissions from the public to the Regional Banking Taskforce—which were effectively ignored—but which highlight the debilitating impact branch closures are having on businesses, community groups, and individuals.
Martin North’s weekly Digital Finance Analytics survey consistently shows that in regional Australia there is:
- High demand for branches—72 visits per year;
- Larger average cash withdrawals compared to in cities;
- High business demand for branch services;
- Far fewer regular online banking users than in cities;
- Far higher digital connectivity problems in regional Australia than in cities;
- A very high percentage of residents inconvenienced by branch closures in the past year—78.5 per cent.
Yet regional Australia is where the banks are closing the most branches!
Click here to watch Martin North present his survey results: Regional Australia Is Another Country!
Make banks do the right thing!
The most disgusting aspect of the banks’ mass-withdrawal of essential services is that not only are they making mega-profits, but $100 million per week of their combined profits is coming directly as free money from the Reserve Bank, which is owned by taxpayers, including taxpayers in regional Australia.
The $100 million per week in free profit is coming from the Term Funding Facility established in early 2020, which enabled the banks to borrow $188 billion from the RBA at 0.25 per cent initially, and later 0.1, which they now park back with the RBA overnight earning 3.1 per cent. The TFF was established to support the banks’ lending to small business in the pandemic, but in December an RBA paper admitted they found “no statistically significant evidence that the TFF increased credit supply to businesses”—i.e. the banks hoarded it.
Given that the average bank branch costs $1 million a year to run, the $100 million that the RBA is currently giving the banks per week in free money, which per year is more than $5,000 million, or $5 billion, is enough to cover the cost of 5,000 bank branches—more than all of the bank branches in Australian combined!
How pathetic is a government that gives the banks free money without putting conditions on it? That’s what we must change, by demanding a moratorium on closures, and an urgent inquiry into the crisis that includes potential solutions such as the option of establishing a government bank to operate through post offices to guarantee face-to-face banking services for all communities, regardless of what the banks do. The banks will scream in protest, but they have destroyed any moral right to object.
Get behind Junee and the other towns that are fighting! Click here to call the Senators in your State this week to demand they support an urgent inquiry!
Click here to sign the Citizens Party’s petition for a post office people’s bank.