PETALING JAYA: Commercial banks in Malaysia should also review their charges and fees for processing bank loan documents in line with its move to drop the charges for certain cash and cheque transactions, says the Bar Council.
While lauding the move to abolish fees for over-the-counter cash and cheque transactions for credit card and financing repayment, its Conveyancing Practice Committee chairman Datuk Roger Tan said it was also timely to review the practice of charging a fee for loan documents, which borrowers sign when taking, for example a housing loan.
"These documents are largely standardised documents for each bank.
"The bank’s solicitors will typically download the documents from the bank’s website and after completing the particulars, print it out for the borrower’s signature," he said in a statement on Friday (Sept 27).
Tan said currently, the bank would charge a fee for "purchase" of these documents, ranging from RM100 to RM500.
This fee, he said is often passed on to the borrowers as part of the solicitor’s charges, adding that some solicitors would absorb the cost.
"This result in the borrowers having to pay additional costs when taking a bank loan and the solicitors getting peanuts for the professional work done, especially purchasers of low and medium cost and affordable homes.
"We object to the charging of such a fee", said Tan, pointing out that the charging of a fee by banks for the sale of loan documents is a breach of Section 37(2) of the Legal Profession Act.
It states that any unauthorised person, either directly or indirectly, draws or prepares documents relating to any immovable property for or in expectation of any fee or gain shall be guilty of an offence under the subsection.
Tan said the council also regretted that despite several representations made to Bank Negara, it failed to put a stop to such unhealthy practices, which unfairly increases the financial burden on consumers.
"Bank Negara must lead and spare a thought for the borrowers and solicitors," he said.
On Thursday (Sept 26), The Star reported that the fee for making credit card and loan payments over the counter with cash or cheques was RM2 per transaction, and 50 sen for payments made using cash deposit machines and cheque deposit machines.
Following this, the Association of Banks in Malaysia said 26 commercial banks would stop charging the fees.