Colombia’s government ordered banks Wednesday to lower the fees they charge for ATM withdrawals and other transactions, saying Colombian banks charge fees far higher than banks elsewhere in Latin America.
Finance Minister Juan Carlos Echeverry told reporters banks will no longer be allowed to charge more than $2 to non-customers who use their ATMs for cash withdrawals. He said banks have been charging “excessive” fees that reached around $3.50 per withdrawal.
“Colombia has the highest fees by a long shot,” Echeverry said. “Colombia’s fees are basically double what other [countries] charge.”
Many banks in Colombia also put rather low maximum withdrawal amounts per ATM transaction, which forces consumer who want to withdraw $300 or $400 to use the ATM two or three times in a row. The consumer then ends up paying a fee of $10 or more for what’s effectively one transaction.
It wasn’t clear if the new rules would force banks to increase their maximum withdrawal amount per transaction.
A representative for Bancolombia, Colombia’s largest lending institution, said the bank had already lowered some fees that are stipulated in the new rules, and is preparing a statement to provide more details.
The finance minister said one of the reasons for ordering banks to lower their fees is to get more Colombians to open bank accounts. He said the percentage of Colombians with bank accounts is very low compared to other countries in the region.
Echeverry said the government was also increasing its reporting requirements for banks to avoid future abuses in relation to banking fees. He said banks will now have to tell customers once a year how much the customer paid in fees. Banks will also have to let customers know 45 days in advance before any new fees are implemented.
Echeverry urged the banks to voluntarily reduce their fees earlier this year, but he said most didn’t heed the call, which forced the government to order the new rules.