Greens MP and banking spokesperson Adam Bandt says the big banks are preparing the ground to avoid passing on RBA interest rate cuts in full.
Mr Bandt says the banks have been running a misleading campaign about their cost of funding when RBA data shows their exposure to international funding has decreased.
He says that he will bring legislation before Parliament to require banks to offer mortgages that will pass on any RBA interest rate cuts in full.
The Banking and Consumer Credit Protection Amendment (Mobility and Flexibility) Bill, currently before parliament, would also make it easier for consumers to switch mortgages by changes to mortgage lenders insurance and force banks to provide loan products that track changes to the Reserve Bank cash rate.
"Ahead of tomorrow's possible Reserve Bank interest rate cut, it is clear the banks are preparing the ground for dudding the Australian public," Mr Bandt said.
"There is a misleading campaign about their cost of finance, fed by everyone's legitimate concern about the precariousness of the world economy, particularly the outlook for Europe."
"The fact is Reserve Bank data shows that the big banks' exposure to short term debt has decreased and Australia's banks are amongst the most profitable in the world with fat interest margins."
"The Treasurer has correctly pointed out the banks profitability, but the government needs to do more than just remove exit fees, an idea first proposed by the Greens."
"My bill will remove barriers to consumer mobility by requiring banks to refund mortgage insurance. Banks will also need to provide a loan product that tracks RBA interest rates as they rise and fall."