High service charges lead unions to propose banks boycott

In December 1997, the Norwegian Federation of Trade Unions (LO) and the Federation of Norwegian Professional Associations (AF) joined forces against the country's largest commercial bank, Den Norske Bank, because of its decision to raise service charges.

The leaders of the Norwegian Federation of Trade Unions (LO) and the Federation of Norwegian Professional Associations (AF), Yngve Hågensen (LO) and Magne Songvoll (AF), made headlines on 1 December 1997 when they called for their members to boycott Norway's largest commercial bank, Den Norske Bank (DnB). This followed DnB's decision to introduce new service charges and to raise existing service charges from 1 November 1997. This is only the latest of many clashes between the trade unions and the banking sector in Norway on the issue of service charges. An opinion poll commissioned by LO and AF revealed that a majority of the people asked expressed dissatisfaction with existing service charges in the banking sector in general. The proposed boycott was not directed at the DnB alone, but the bank was made the main target due to its size and the scale of its service fees. DnB later reconsidered its original decision, and decided to lower charges on some services.

The action taken by the two leaders is in accordance with the 1993 LO/AF agreement of cooperation which, although a rather loose agreement, has led to some cooperation on issues where the two confederations' interests converge. Thus, it is not the first time they have cooperated in relation to bank service charges, but it is the first time, according to the two unions, that it has led to such media attention and had such a positive effect. Direct action of this kind is not the only weapon available to the unions in relation to the banks. The issue of service charges on accounts into which wages are paid is incorporated into the "main agreement" between LO and the Confederation of Norwegian Business and Industry (NHO), in which it is stipulated that cash withdrawals from wages accounts should be free of charge. It is up to each individual employer and the bank to decide the details relating to these charges, but with the proposed revisions to the main agreement which may come into effect next year it is expected to be easier for employees to influence employers in this process.