Royal Commission into the Banking, Superannuation and Financial Services Industry

I keep on saying we need to do as Iceland did. Jail is an effective answer to many who don’t fear fines as the company will pay them. There is generally no responsibility taken when fines are just considered a cost of doing business. If a person however faces a strong possibility of jail and thus removal of lifestyle, freedom and an ongoing personal taint because they have been criminal and thus incarcerated is probably of much greater impact.

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The theme of ASIC’s annual forum in May this year had a Hollywood ring to it – ‘other people’s money’. The 1991 movie of the same name starring Danny DeVito was about a corporate raider who put profit above all else, as mere humans fell by the wayside. It’s an appropriate theme as the foul stench left by the royal banking commission begins to dissipate. ASIC chair James Shipton set about to “remind the finance industry of its core function – to serve people – and its obligation to act efficiently, honestly and fairly”.

On the last two obligations, the Australian financial services industry – in particular the big banks – are
starting from a low baseline. Shipton issued a “fairness challenge” to the industry and invoked the Hippocratic oath required of medical students – ‘first, do no harm’. With each profit-minded initiative, the industry must ask itself: ‘Is this practice or product going to cause harm, be detrimental or have a negative consequence?’

The answer would be a resounding yes in many of the instances that came to light at the royal commission, including charging fees to people who were no longer alive and deliberately pushing people deeper into debt. If these sorry tales are anything to go by, the commissions and bonuses that drives the banking world are inherently antithetical to the ‘do no harm’ philosophy.

In what could be construed as a colossal understatement, Shipton cast doubt on the industry’s
performance on the fairness front in recent years. “I am not convinced this level of questioning and procedural discipline has been applied by the financial industry when developing, and reviewing, business practices and financial products,” he says.

The banking industry’s commitment to ethical behaviour remains a work in progress, but perhaps
the findings of the banking royal commission will be a genuine game changer instead of the catalyst of another long report that, damning as it is, doesn’t change much.

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Is he still questioning whether or not it has?..not convinced?..how much proof do you need stuffed in front of your face to say “I am convinced it hasn’t been done”, did the person actually see and read the report or did they just have some points pointed out to them in passing. If they can’t yet see the failure no wonder ASIC has such a very poor record. No wonder ASIC fails if it has executives who can’t see, or maybe they just ignore the fails of the industry they have oversight of.

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An article warning about the potential for consumers to quickly forget the banks’ behaviour and advising that only 7 of the recommendations from the Banking RC have been implemented to date.

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An informed view on likely progress implementing the RC recommendations, from one who may claim some first hand knowledge.

Key points:

  • Kenneth Hayne wrote the final report from the banking royal commission that recommended sweeping changes to the sector
  • The former High Court judge has called for increasingly frequent calls for Royal Commissions not to be dismissed
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ASIC loses their court case against Westpac.

Presumably Kenneth Hayne will be less than impressed.

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One bank deciding to lead the way in relation to responsible lending…

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To be clear, he is saying that Royal Commissions are more necessary when government cannot focus on more than the urgent and immediate, rather than the important.

To paraphrase, stop politicising, shrinking and demeaning the public sector, and start listening to it! Unfortunately we have been going in the opposite direction, and ended up with Yes Minister types who only care about what is happening in their three year contract.

This sounds like a case in which the law needs to be clarified, and lenders need clear guidance on how loans should be decided.

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Hopefully this will be fully implemented and quickly.

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Originally it was going to be all the recommendations, now it is a watered down to 54 out of 79 list. Whose fault was it they weren’t implemented sooner…hmmm the Govt in power at the time…now who was that, oh yes the LNP one who didn’t want the RC at all in the first place. Sorry but the sluggish response was brought about by the Govt reluctance to do something but now they are being criticised for failure in a number of areas eg Climate Change & Coal Mining they have to show willing so as to turn the spotlight off their failures. Sort of sucked in voters as they play with us again.

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We explain why reform in the mortgage broking industry is needed urgently:

https://www.propertyobserver.com.au/forward-planning/102872-reform-to-the-mortgage-broking-sector-is-urgent-choice-ceo-alan-kirkland.html

We also highlight in this article that lobbyists are already fighting changes to the industry, making the path to reform difficult:

And finally a study from University of Melbourne has attempted to quantify the cost of all this misconduct:

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Maybe something to worry about…Negative Interest Rates. Yep when Banks pay you to take a loan out ie you don’t pay interest and the Principal goes down even without payments being made. To read an article about this and how it might affect our Banks/Financial Institutions and us see:

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Another wake-up call for NAB courtesy of ASIC.

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Unfortunately nobody has offered me one of these loans yet :frowning: .

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Need to go to Denmark lol at -0.5% there.

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On MSN there is an article about ASIC making Allianz refund around 15,000 customers who were sold consumer credit insurance for things like loans and mortgages. The customers were ineligible to claim the insurance coverage for disability or unemployment and for death cover for those under 21 as they were very unlikely to require it. . The refunds will amount to about $8 million.

https://www.msn.com/en-au/news/company-news/allianz-australian-unit-to-refund-customers-for-insurance-mis-selling/ar-AAGnB89

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Not sure whether this belongs here.

A while back, I was bombarded with messages about PayID. Still get the occasional one. Seems it’s opened up new security holes.

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Another article regarding ASIC taking some more banks to court for their disgusting behaviour.

Anyone else remember the pathetic BOQ ads 'It’s actually possible to love a bank"?

I could certainly love a bank which cops an eye-watering fine and the directors and senior management are all imprisoned, or more precisely I could love the regulator if it happened.

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With Royal Commission into Banking now beginning to fade into the distance, we’ve decided it is time to close this thread. The comments, discussion and key points being shared here are a credit to the Community - well done and sincere thanks from all of us at CHOICE for being part of this event.

It goes without saying that much of the work in this area is still ahead, so please join the new discussion thread for everything post banking commission. If banking, insurance and money-related topics are an interest for you, please share your relevant reading in our thread on consumer finance news.

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