The Law Society of Ireland is calling for solicitor client accounts to be exempt from a proposed new charge, so-called negative interest, from two of the country’s leading national banks.
The call comes as solicitors who are customers of AIB or Bank of Ireland were notified of the banks’ intention to introduce a charge on all monies, including home mortgage loans, held in solicitor client accounts.
The President of the Law Society of Ireland, James Cahill, said: “We are deeply disappointed at this latest attempt from the banks to increase profits by penalising consumers, particularly future homeowners who already face significant financial challenges. The proposed new charges, so-called negative interest, on monies held in solicitor client accounts are unjust, over-charging and contrary to public policy and consumer protection.”
“The banks have wrongly included solicitor client accounts in their general application of negative interest rates, which they maintain apply to savings accounts. Solicitor client accounts are not savings accounts; they are a necessary part of commercial and conveyancing transactions. Put simply, when a person is paying out their borrowed money to complete the property purchase they will have less money than when they received the loan. A similar situation will exist for those who are selling and paying off a mortgage. As a direct result of this charge, they will need to have additional money to make up the difference,” explained Mr Cahill.
“While the banks continue to claim that the new charges will not impact ordinary consumers, unfortunately, as is so often the case, it is the consumer that will quite literally pay the price. The Law Society on behalf of consumers, clients and our members will continue to engage with the banks to address this urgent matter.”
“We are calling on AIB and Bank of Ireland to exempt solicitor client accounts from these new charges to reduce unnecessary financial pressures on consumers. If the banks decide to proceed as planned, every day consumers will lose out.”