Mr Hockey says the government has failed to deal with the "fundamental challenges of the banking system".
"This is about political relief for the government, not mortgage relief for bank customers," Mr Hockey told reporters in Sydney on Sunday.
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Mr Hockey said two of the four major banks had already banned home loan exit fees.
"This will have an impact on smaller players," he said.
"Other fees will go up because the smaller players need that fee income to remain somewhat competitive with the larger players."
Mr Hockey said the government's banking reform package had nothing for those with a current loan or small businesses.
"If it was reform it would be considered, it would be detailed, it would be across the board. It's not reform."
