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Lifting the veil of bank service charge secrecy sumer. And with some help from government, it's ultimately the customer -- not the banks -- that should hold the heavy upper hand. by Ann M. Smith If you've ever had a "get even" fantasy involving the seemingly in- destructable Canadian banking community, wait no longer. Bankers in this country are ripe for the picking. The fuss began earlier this year when the powerful House of Com- mons finance committee decided to begin a serious probe into the way banks levy service charges on their customers. It didn't take long for the committee to concur with popular belief that, yes, there is sufficient evidence pointing to possible Bank Act violations by a number of these institutions. The report also found that customer service charges have been rising by roughly four times the rate of inflation. It doesn't say whether these increases are justified, but does acknowledge that the current situation makes it impossible for consumers to gain proper information on prices for comparative shopping. Finance committee chairman Don Blenkarn said the MPs are determined to learn how the banks justify these exorbitant increases on service charges while other con- sumer prices and costs have re- mained relatively stable. The ~~ average 17 per cent annual rate hike, he said, is deeply disturbing. During the same period, the average growth of the consumer price index was just 4.5 per cent while the annual growth of non- interest expenses at the Big Five (the Royal Bank, Bank of Montreal, Canadian Imperial Bank of Com- merce, Bank of Nova Scotia and Toronto Dominion Bank) was only 6.7 per cent during 1982-87. Blenkarn's committee will try and implement changes to force the banks into putting their cards on the table. Few Canadians are aware of, for example: e A 154 per cent increase on all bounced cheques -- from $5.50 in 1982 to $14 in 1987. e A 60 per cent increase over two years to cover an overdraft charge -- from $2.50 in 1984 to $4 last year. In 1982-83, this service was provided free of charge. ¢ A 70 per cent increase in the cost of renewing a mortgage -- from $50 to $85. And the list goes on. The banks claim that these in- creases reflect a wider array of ser- vices now offered to the customer. Critics, however, vehemently disagree. In fact, many MPs and consumer groups blame the banks for digging themselves into this huge hole by making too many risky Third World loans in the early 1980's. It isn't right, they say, that the customer should now have to pay for these mistakes. Like it or not, the banks have finally started to listen. The Royal admitted that some service charges have caught consumers by surprise and says it will begin publishing a locked fee schedule for its 6.5 million Canadian customers each year. And the Bank of Montreal has decided to reduce savings ac- count service charges for customers of "Modest means." Many would say it's the least they can do. Regardless of the finance com- NO VALUE FOR MONEY Major chartered banks' performance Canadian Imperial Bank of Commerce Bank of Nova Scotia Toronto Dominion Bank Royal Bank Canada a Montreal 86.9% ROMEO gsc, 88.7% 87.7% 845% i of Canada TI6% Percentage of small business respondents who felt the increase in service costs did not reflect a comparable increase in the amount of services received. mittee's final report, however, the banking community will now have to devote much more of its time trying to woo the Canadian con- First Canadian built Civic ALLISTON, Ont., April 7 -- The first Honda Civic Hatchback pro- duced at the Honda of Canada Mfg., Inc. plant at Alliston, Ont., was driven off the line today in a brief ceremony. The car, a white Special Edition model, was brought off the produc- tion line by Hiroshi Hayano, Presi- dent of Honda of Canada Mfg., Inc. and Ross Robinson, Senior Vice President Automobile Sales, of Honda of Canada Inc., which distributes Honda products in the Canadian market. Also participating in the ceremony was Shoichiro lrimajiri, President of Honda of America Mfg. of Marysville, Ohio. The Civic Hatchback is being built on the same production line as the Honda Accord model, which has been produced at the Cana- dian plant since it became opera- tional in November of 1986. As the only manufacturing facility of Civic Hatchbacks in North America, the Canadian plant will be supplying this model to Honda dealers in both Canada and the U.S., accor- ding to Hayano. The Canadian manufacturing facility is scheduled to produce about 50,000 cars -- both Civic and Accord models -- this year. That total is expected to increase to 80,000 units in 1989 on a two- shift basis. The total workforce at the plant will reach about 800 once it is in full production. Built on a 181.2-hectare (450-acre) site, the state-of-the-art Honda plant covers 83,000 square metres (900,000 square feet). Since the plant was opened, a hemming operation has been add- ed to finish the doors, tailgate and hood of the Civic Hatchback model, and a stamping facility is now under construction as well. Se Le GREEN FEE PLAY New members welcome. Initiation and trust share $175.00 Membership Fee $425.00 Tel: 526-5822 * Receiverships Agency Appointments Business Assessments * * * B.A. Sargent, PANNELL KERR MacGILLIVRAY INC. Receivers and Trustees in Bankruptcy John Hobbs & Co. Trustees and Receivers Ltd. Barrie, North Bay, Sudbury Providing a full range of insolvency services including: Corporate and Consumer Bankruptcies Initial Consultation Free Resident Trustee 84 Worsley St., Barrie, L4M 1L8 705-722-3133 Member of the Canadian Insolvency Association SHELLTREE INVESTMENTS SERVICES JERRY J. ROSE Mortgage Broker First and Second mortgages arranged, bought and sold at Prime Rates e Epworth Investment Corp. e Epbridge Investment Corp. e Epcor Management Ltd. Unit 30 722-8767 Page 4B, Wednesday, June 1, 1988