EXCESSIVE bank penalty fees would be banned under a proposal to be considered by a Senate inquiry.
A Bill introduced by Family First senator Steve Fielding would ensure penalty fees for dishonoured cheques of overdrawn accounts would only cover costs incurred by banks.
The Senate yesterday voted to refer the Bill to a committee inquiry.
The Bill would also boost the powers of the Australian Securities and Investments Commission to monitor fees, investigate complaints and demand information to ensure fees reflect costs.
Consumer group Choice backed the inquiry.
"We need a regulator with the powers to look at penalty fees and take action where they are unfair,'' Choice said.
The Australian Bankers Association has published a fact sheet about penalty fees, with advice on how to avoid them and a list of low-fee bank accounts.
