Progressives call for UPM to take over bank: Cayman News Agency

(CNS): Opposition Leader Roy McTaggart called on the UPM government to require Cayman Islands Commercial Bank to implement a mandatory modern code of conduct, amend the Registered Land Law to enforce security over real estate, and ask CIMA to review whether fees charged and deposit rates paid are fair. After years of low interest rates, banks have increased fees to improve profitability. But with 11 interest rate hikes in the past two years, bank profits have soared while borrowers have struggled.

A private member’s motion proposed by the leader of the People’s Progressive Party and seconded by deputy leader Joey Hew noted that the agreement for local banks to give 30 days’ notice before increasing mortgage rates has expired, but this does nothing to help those who need to increase their repayments, but instead puts their homes at risk of foreclosure, forcing them to turn to the government for help when they can’t pay their mortgages.

Mr McTaggart said the Law Reform Commission had launched a public consultation to consider a new Registered Land (Amendment) Bill, which the government was likely to adopt. The bill aims to reform the foreclosure process and simplify the terms affecting land charges, lending and pre-action agreements to better protect borrowers.

The opposition said they want government to encourage the Cayman Islands Bankers Association to introduce a voluntary banking code that recognises the need for banks to consider situations of financial hardship with sympathy and a positive attitude, exploring alternative repayment arrangements for those in financial distress. Failing that, the motion calls on government to consider legislation to create a mandatory code that would hold banks accountable and protect their customers, particularly those with mortgages.

PPM members suggested the regulation should be based on legislation introduced in the UK last year that imposes obligations on banks to their customers, requiring them to provide good outcomes and higher standards of consumer protection, including foreclosures.

They also called on the government to ask CIMA to review and report to Parliament by the end of this year the fairness of fees charged by retail banks and the interest rates paid on savings and other deposit accounts, ensuring these rates and fees are fair and reasonable for all customers.

While interest rates for borrowers have hit their highest levels in decades, rates paid to customers with savings accounts or cash on deposit have barely budged, in some cases to just 0.1%.