Amid mounting backlash, CBA announces a review and pause of the newly introduced $3 fee for over the counter withdrawals

Commonwealth Bank (CBA) has backtracked on its decision to introduce a $3 fee for cash withdrawals over the counter and via telephone after facing widespread criticism from customers, the government, and the public. The bank, which initially planned to implement the charge from January 6, 2025, quickly reassessed the move following a storm of complaints regarding the financial burden it would impose on customers already struggling with cost-of-living pressures.

In a statement, CBA’s Group Executive for Retail Banking Services, Angus Sullivan, admitted that the bank had failed to effectively communicate the fee change to its customers. Sullivan acknowledged the sensitive timing of the decision, particularly with Christmas just around the corner, when many Australians are already feeling the pinch. “We recognise the impact any fee change can have, especially during the holiday season. We’ve clearly not communicated this properly, and that’s something we’ll address immediately,” he said.

The fee, which would have applied to in-branch and over-the-phone cash withdrawals, was part of CBA’s broader strategy to streamline its banking processes and reduce its reliance on physical branches. However, the bank was quickly inundated with criticism, particularly from customers who would be affected by the new charge. A significant portion of CBA’s customer base—those using Complete Access accounts—stood to face higher fees for accessing their own money in person.

Amid this backlash, CBA decided to pause the migration of customers to accounts that would incur these charges, allowing affected individuals time to reconsider their options. The bank also revealed that most customers who would have been impacted would instead be moved to lower-fee accounts, potentially putting them in a better position financially than before. Sullivan noted that approximately 90% of CBA’s Complete Access customers would either be unaffected or stand to benefit from the changes, while the remaining 10% would receive personalised assistance to ensure the best possible outcome.

Despite these changes, the backlash continued, with many questioning why the fee had been introduced in the first place. Critics argued that it disproportionately affected older customers and those living in remote areas who still rely heavily on in-person banking services. “It’s simply unfair,” said one long-time CBA customer, who has used the bank’s services for decades. “For some of us, withdrawing cash from a branch is the only option, and now we’re being penalised for it.”

Federal politicians also weighed in on the controversy. The government, already under pressure due to rising living costs, urged CBA to reconsider its approach. Treasurer Jim Chalmers, responding to the outcry, expressed concern over the potential negative impact on vulnerable Australians, stating, “This fee would have created unnecessary hardship for people already facing financial strain.”

Notably, the new fee was also seen as part of a broader trend in the banking sector, where large institutions are increasingly charging for services once considered free. This shift has sparked an ongoing debate about the role of big banks in Australia’s economy and whether they are doing enough to support customers in times of financial difficulty.

In response to the uproar, CBA announced that it would be reviewing its fee structure and engaging directly with customers to find a solution that balances the bank’s need to remain profitable with the financial well-being of its customers. Over the next six months, CBA promised to reach out to affected customers to discuss their options, including potential fee waivers and alternative account types.

As part of its broader effort to rebuild trust, CBA also committed to improving communication around future changes to its fee structure, promising clearer explanations and more personalised support for customers. “We understand the importance of providing clear, transparent communication and ensuring that our customers are always at the heart of what we do,” said Sullivan.

Despite these steps, the bank’s reputation has taken a hit. For many customers, the fee was the final straw in a series of unpopular decisions by financial institutions. The question now remains whether CBA can recover from the controversy and restore confidence in its services.