Commonwealth Bank Backs Down on Cash Withdrawal Fee After Political Pressure

People walk past a branch of the Commonwealth Bank in Melbourne, Australia, on Feb. 6, 2019. William West/AFP via Getty Images

After 24-hours of pressure from both sides of politics, the Commonwealth Bank (CBA) has decided to back down on introducing a $3.00 (US$1.95) withdrawal fee for cash.

The fee applies to withdrawals at the branch, through agencies such as Australia Post, and over the phone. However, it does not apply to cash withdrawals from ATMs.

On Dec. 4, the CBA’s head of retail services, Angus Sullivan, announced a temporary reversal of the charge citing inflation concerns.

About 100,000 customers were estimated to be impacted by the change, and for the next six months, the CBA will hold off.

“Those we expect might be slightly worse off and need more support in making sure their banking arrangements are appropriate, we’re going to pause the changes we announced,” Sullivan said.

“We’re going to spend the next six months individually engaging with those customers to make sure we have a solution tabled for each one of them rather than a simple migration across to a Smart Access account.”

Ministers Put Pressure on Bank

Finance Minister Katy Gallagher has joined the chorus of government ministers calling on the Commonwealth Bank of Australia (CBA) to reverse its $3 (US$1.95) cash withdrawal fee.

Gallagher indicated the government is paying close attention to the decision and urged a rethink just before Christmas.

“I think that this type of charging and looking at $3 per transaction, I think, it’s really hard, and particularly for those customers that have those types of accounts and want to go into the branches,” she said on ABC News Breakfast.

“So we’re having a close look at this. I would really think that some goodwill here just before Christmas is for the CBA to have a think about the announcement that they made yesterday.”

Opposition Agrees

Meanwhile, Shadow Energy Minister Ted O'Brien also backed calls for the CBA to reverse the decision, raising concerns about elderly Australians.

“I’m thinking about those same senior citizens who are struggling because, all of their life, they’ve become accustomed to walking into a branch,” he said on the ABC.

“I think, for them to be stung by $3 is certainly worthy of a serious rethink on behalf of the bank.”

This comes after Assistant Treasurer Stephen Jones called on the bank to reverse its decision on Dec. 3.

“This is a kick in the guts for ordinary Australians and the worst Christmas present imaginable. Commonwealth Bank has to rethink this terrible decision,” he told reporters.

The assistant treasurer explained the decision appeared to be a “tax on Australians” who demand the right to use their cash, and said the “government won’t stand for it.”

He added that the government would work for Australians to ensure they could continue to use cash.

“But if they don’t use cash and they want to use a debit card for their everyday transactions, they should be slogged with a surcharge for doing it, and if they want to go in and see their bank branch, we think Australians should have access to banking services wherever they live,” he said.

What Is Going On?

The CBA will shift customers from Complete Access accounts to “Smart Access” as part of its move to charge $3 withdrawal fees.

The withdrawal fee will be waived for customers under 18 or those with an aged, disability, or war veterans pension.

“There’s no need for you to do anything, as your Complete Access accounts will automatically change to Smart Access accounts. We’ll notify you before switching your account,” the CBA said on its website.

The CBA is not the only bank charging fees for withdrawals.

On Nov. 1, ASX-listed Bendigo and Adelaide Bank introduced a $2.50 fee for over-the-counter cash withdrawals, not including ATMs. ANZ and Westpac also charge fees for “staff-assisted” transactions on business accounts.

More Reactions to the Move

Meanwhile, advocacy group “Cash Welcome” expressed anger at the bank’s decision in a post to social media on Dec. 4.

“$3 in branch withdrawal fee? NO, NO, NO,” the group posted to Facebook.

Founder and CEO of StoreConnect Mikel Lindsaar criticised the bank on LinkedIn, “Charging customers $3 to withdraw their own cash from your branch that you earn interest on already?

“This an obscene money grab against the people who can least afford it. Shameful.”

Queensland Senator Gerard Rennick also weighed in on Dec. 3, pushing for establishing a publicly-owned bank.

“The only way to stop this behaviour is to have a public bank that doesn’t engage in this kind of extortion,” he said on Facebook.

Commonwealth Bank shares are currently down nearly 1 percent on the market at the time of writing on Dec. 4. However, the bank’s share price has soared nearly 49 percent in the past year.

In the 2024 financial year, the bank reported a $9.8 billion annual cash net profit after tax, 2 percent lower than the prior corresponding period.

BankWest, a subsidiary of the CBA, has closed all 45 branches to become digital only. A further 15 regional branches were flagged for conversion to Commonwealth Bank branches.

“Now, we’re investing in becoming a digital bank by delivering simple products and new digital experiences nationwide,” the bank said.