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The Royal Commission into Banking - Flow-on effects for consumers

The Royal Commission into Banking and the effect on the very ordinary Consumer.

To my knowledge my wife and I were not "cheated’ by the bank(s) pre RC i.e. not overcharged or charged for services we didn’t need to have.

This is how the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (RCB) into banking has affected us.

I recently received a UK cheque in GBP for an insurance policy that had come to term. The cheque was a bank cheque from a reputable well-known international bank. I duly signed the back of the cheque, and as I am disabled, I signed the back of the cheque and asked my wife to pay it into our joint account as we had done in the past. She returned from the bank and said we can’t do it that way anymore (post RCB). We need your husband (me) to complete a mandatory declaration form or for you (my wife) to do it we must see a power of attorney (original) document. I completed the said form and my wife returned to the bank and paid in the cheque. She was then told that (post RCB) the cheque would take up to 28 days to clear as it needed to be verified (the Main Office in Melbourne) with the issuing bank. To prove that it wasn’t fraudulent or destined for terrorism, etc. Finally deposited into our account 35 days later!

I also receive some very small dividend shares from the UK payable 6 monthly in either Euros or GBP, these would be worth less than $10AUD per cheque.

The Royal Banking Commission has meant major changes to how foreign currency is handled. In the days pre-RCB I could accumulate these UK dividend cheques and once they were of sufficient value, I would pay a one-off fee of $AUD15 to clear them all. I could do this just by signing the back of each cheque and my wife could deposit them on my behalf.

Since RCB you can only deposit a single cheque at a time, fill out an individual debit declaration form, correctly dated, wait 28 days to ensure the cheque is genuine and pay a fee per cheque deposited of $AUD 25. None of the dividend cheques that I receive, make it worthwhile for me to deposit them here in Australia.

In one incident post RCB we filled out the required forms and dated them, we couldn’t get to the bank that day (they had closed) so my wife took them in the next day, to be told that the date was wrong and they had to be filled out again with the “correct” date. At that time, we still thought that it was $AUD15 total for all of the cheques we had accumulated and not $AUD25 per cheque. After 4 hours and 3 separate and 4 phone calls, we tore the cheques up!

Has anyone else been adversely affected by the changes the Royal Commission into banking has made, than they were before the Commission deliberated?
pH

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What did the stat dec have to declare? Was it tax residency and/or citizenship?

You may be atop workarounds, but if not, and I am not familiar with UK/EU share trading but in both the US and Australia dividends are preferentially direct deposited into a brokerage related cash account. If you arrange a brokerage (trading platform) account and have your dividends directed there by direct deposit, you could then transfer your funds here through any of myriad forex companies such as the share trading account, OFX, Western Union, etc. usually at fairly low cost.

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Pre-RCB they usually took between 4-6 weeks to clear. They take the same time now as there are many checks and balances needed to allow international cheques to be verified and then electronic funds transfers to be sent by the issuing bank.

This money article from 2010 was about how long to takes for international bank cheques to clear

In 2010, it took the person in the article 24 working/business days (about 5 calendar weeks) to have the cheque cleared.

As @PhilT indicated, contact the company which manages the share registry. The companies name should be on correspondence about shareholdings, dividends etc. Most registry companies allow payment details to be managed online (such as how payment is to be made (cheque, direct deposit, dividend reinvestment etc).

If it is not possible to do it online for various reasons, they usually can issue forms to be completed and then returned for processing.

They should be able to arrange to have the dividend deposited directly into your Australian bank account through an EFT. The EFT can take a week or more to process after the nominated share payment date.

The bank should be able to process a cheque deposited by either joint account holder, if the account has been set up to allow this to occur. This Westpac webpage explains joint accounts…

It is also possible to place restrictions on a joint account such that one account holder has restricted abilities to bank, without approval of the other joint account holder. I wonder if your account has been set up as such.

If you registered a Power of Attorney (PoA) with the bank for your wife to do banking on your behalf, and the cheque being deposited is in your name only, then your wife may need to prove that she can bank on your behalf when presenting a cheque in your name (usually some sort of photo ID is required when banking on your behalf).

If the PoA has not been registered, then the bank needs to have a certified copy of the Power of Attorney to allow your wife to carry out banking on your behalf. This BankWest website explains this…

https://www.bankwest.com.au/help/legal/power-of-attorney

Some PoA have limited duration, and current certified copies of a PoA would need to be registered with the bank should the previous one’s have expired.

The other thing which may affect a cheque being deposited is if the bearer has been struck out on the cheque. The Commonwealth bank provides some information on what this means…

image

I wonder if the cheque fits into this category and additional evidence was needed to allow your wife to deposit the cheque. Maybe your signature didn’t fully match the one on the bank’s records and why additional paperwork was required (such as updating signatures with the bank).

It sounds like this form was about registering the PoA that you have or approving your wife to bank on your behalf.

The Australian Government, through AUSTRAC, has mandated through legislation for banks to prepare threshold transaction reports for any transaction over $10000. See…

https://www.austrac.gov.au/business/how-comply-guidance-and-resources/reporting/cash-transactions-over-10000-ttr

It is the government who has changed the goal posts in recent years and the purpose of such reporting is to ‘deter and disrupt criminal and terrorist activity’.

The above was not affected by the Royal Commission. It has been standard practice for many years.

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To be clear, there is no problem with banks depositing cheques given the two options for processing them. That is administrative. It is the fees for foreign cheques that are often more than the values of the cheques.

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Don’t blame the Royal Commission but blame those who were laundering money and those in those well-known banks who did not do anything to stop money laundering through their ATMs and other means.

Once the money laundering was exposed (and some of the uses being made with that money) the Federal Government had to do something to make it harder.

There’s workaround suggestions made here for you. There’s foreign exchange services that are worth a look, and while they are a bit complicated to start with, they would do want you want.

Also it’s hard to believe but UK banks and share registries are not so good as their Australian equivalents.

Here’s another effect of the Royal commission on banking.
Received this from my super fund today.

AustralianSuper

SEN-EDM-FeesChanges-Banner-600x232px.jpg

From 1 April 2020 a new fee will apply to your super (accumulation) account. This fee is being introduced to offset the impacts of the Federal Government’s Protecting Your Super changes, which came into effect on 1 July 2019.

How the new fee will be charged

The new Administration fee – Protecting Your Super will be deducted from investment returns daily, before returns are added to your account balance. The fee is variable, up to a maximum of 0.04% pa of your account balance. This fee is in addition to the Administration Fee of $2.25 per week and investment fees.^

For the 2019/20 financial year, the total annual amount will be charged over a 3-month period from 1 April 2020 to 30 June 2020. From 1 July 2020 the amount will be charged over a full financial year.

For example, if you have an account balance of $50,000, you’ll be charged up to $20 between 1 April 2020 and 30 June 2020 and up to $20 per year from 1 July 2020 onwards.

The new fee does not apply to Choice Income or Transition to Retirement Income accounts.

Why we’re introducing a new fee

Under Protecting Your Super, members with an account balance of less than $6,000 have their administration fees, investment fees and indirect costs capped at 3% pa. This reduces the funds available to cover administration costs, products and services for all members. The new fee will be used to cover this gap in the most sustainable way.

You don’t need to do anything

The fee will automatically apply to your account from 1 April 2020. It will be shown on your 2019/20 Annual Statement.

Fees over the last 10 years

Even with the new fee, the combined administration and investment fees for the Balanced investment option (where most members are invested) are still lower than they were 10 years ago.

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An article today raises the call for a new Publicly owned bank eg PostBank. The ideas in the article have great merit in my opinion. One being that a Bank such as they describe would be accountable through our pollies to “The Us” (the plebs :smile:) and not shareholders who likely are corporate.

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If only it could happen… but consider the partisan interests in play. Although ‘back to the future’ with a publicly owned bank has more merits than not, a proposal funded by a union is not going to fly, especially when industry super funds that have mostly set the standard for ‘good’ as compared to retail funds are in this government’s cross hairs.

However, if Auspost became ‘PostBank’ it might be able to cease postal services entirely, gifting that industry to private enterprise. So many opportunities for dollars in the right pockets as well as killing off another government service.

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Business as usual for Bendigo and Adelaide Bank, and I am gobsmacked that the ‘full force’ of oversight has been applied :roll_eyes:

The Banking Code Compliance Committee (BCCC) was set up in the wake of epic failures with the industry exposed at the Hayne royal commission.

It holds members to standards set out in a code of practice, a set of guidelines that has no weight in law…There is no financial penalty. The entire sanction is being ‘named and shamed’…

This will get Bendigo and Adelaide Bank’s attention, surely it will.

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The usual pontification we get to pacify the masses and lull them into thinking some serious consequence has been applied to the malfeasance of the Financial organisations. Yet still nothing really, and we could ask again what has ASIC, APRA, AFCA etc etc etc etc done to rein in the bad behaviour…this one so serious that it was noted as “serious (bad) and systemic (throughout the businesses like metastatic cancers)”. My comments are those in the brackets.

Confidence filling news? Yeah I’m confident as usual nothing has really changed.

" The CCMC

The Committee was formerly known as the Code Compliance Monitoring Committee or CCMC. The CCMC monitored compliance with the 2004 and 2013 versions of the Code. The BCCC has the power to monitor compliance with the 2019 Code and these earlier versions of the Code."

So really just a name change and still the same Committee…

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‘Monitor’?
Webster’s has at least 8 different meanings or used for the word.

With the instance noted perhaps they need to add a ninth to reflect common usage and for completeness?

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I liked a synonym from that list ie cover. They are used as a cover for the businesses seems probably closest to the truth.

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