GRAND, CAYMAN, Cayman Islands, (CNS) – Opposition Leader Roy McTaggart is calling on the UPM government to make Cayman’s high street banks implement a mandatory, modern code of practice, amend the Registered Land Act to enforce mortgage-type security over real estate, and ask CIMA to review the fairness of fees charged and interest rates paid on deposits.
After years of low interest rates, banks had increased fees to improve profitability. But with eleven hikes over the last two years, bank profits are soaring while borrowers are struggling.
A private member’s motion filed by the PPM leader and seconded by his deputy, Joey Hew, notes that the agreement by local banks to give a 30-day notice before increasing mortgage interest rates has expired, though it did nothing to help those with increased payments, putting homes at risk of foreclosure and forcing them to come to government when they cannot afford mortgage payments.
McTaggart said the Law Reform Commission has already initiated a public consultation to consider a new Registered Land (Amendment) Bill, which the government could adopt. The goal is to reform the foreclosure process and to streamline the provision impacting the charge of land to provide for a lending and pre-action protocol to better protect borrowers.
The opposition said they want the government to encourage the Cayman Islands Banker’s Association to introduce a voluntary banking code that recognises the need for them to consider cases of financial difficulty sympathetically and positively, exploring options for alternative repayment arrangements for those in financial trouble. If not, the motion calls for government to consider legislation to provide for a mandatory code that will hold the banks accountable and protect their customers, especially those with mortgages.
The PPM members are suggesting that the code should be based on the one rolled out in the UK last year, which imposes a duty on banks to their customers, requiring them to deliver good outcomes and higher standards of consumer protection, including for loan foreclosures.
They have also called on the government to ask CIMA to review and report back to parliament by the end of this calendar year on the fairness of fees charged by retail banks and the fairness of interest rates paid on savings and other deposit accounts, ensuring that these rates and fees are fair and equitable for all customers.
While interest rates have reached the highest levels in decades for borrowers, the interest rate paid to customers with savings accounts or cash on deposit has barely moved from as little as 0.1 percent in some cases.
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