BFCSA Blog

Led by award-winning consumer advocate Denise Brailey, BFCSA (Inc) are a group of people who are concerned about the appalling growth of Loan Fraud around the world. BFCSA (Inc) is a not for profit organisation in the spirit of global community concern and justice.

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Let good times roll, says RBA The Australian 12:00am August 11, 2018 David Uren   The Reserve Bank has forecast a period of prosperity with rapid economic growth lasting at least until the end of 2020, powered by fast-rising exports and the building of office towers and major ­infrastructure. The bank’s upbeat quarterly economic outlook says the unemployment rate will drop to 5 per cent over the next two years, which should enable the Reserve Bank to start lifting its benchmark interest rate. “The Australian economy remains on track to achieve lower unemployment and higher inflation over time,” the report says. “Supported by accommodative domestic monetary policy and a positive international outlook, GDP growth is expected to be a little above 3 per cent in both 2018 and 2019.” The forecasts, which are broadly consistent with those in the federal budget, include an upgrade for 2018 that suggests the strong 1...
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IOOF super fund staff raided member reserves Australian Financial Review Aug 10 2018 8:25 PM James Frost   Staff at wealth manager IOOF raided a reserve fund to fix their own bungle then lied to both customers and the regulator about what had transpired, the Hayne royal commission heard on Friday. The fifth day of hearings into superannuation continued the week-long exposure of the shadowy world of super trustees, who are obliged to act in the best interests of fund members but have repeatedly been shown to be compromised by commercial allegiances. IOOF's raid of the members' reserve funds was just one of several that have occurred under the watch of veteran managing director Chris Kelaher, who has been in the job since 2009. When asked whether the issue of dipping into the reserve to repay members had arisen at other times Mr Kelaher said: "You will have to be more...
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PM fends off Lucy’s links to $444m reef grant recipients The Australian 12:00am August 10, 2018 Andrew Clennell, Geoff Chambers   Malcolm Turnbull’s office has confirmed that two of the directors of the Great Barrier Reef Foundation — the recipient of a $444 million grant from his government awarded without tender — may have been hosted at the Prime Minister’s home by wife Lucy. The Australian can reveal the head of the Great Barrier Reef Foundation’s philanthropy committee, Stephen Fitzgerald, a one-time head of Mr Turnbull’s former investment bank Goldman Sachs, was on the board of the European Business Advisory Council at the same time as Mrs Turnbull. Mr Fitzgerald is also on the council of advisers for the US Studies Centre in Sydney — where Mrs Turnbull is patron — and was on that council while Mrs Turnbull held the role of deputy chair between 2012 and 2015. The chair...
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Understandable community anger is a threat to us all The Australian 8:09am August 9, 2018 Robert Gottliebsen   We looking at entering a new an era of crime and punishment in Australia as the community loses trust in its politicians and corporate executives. Suddenly the possibility that the actions of politicians and corporate executives could be classed as “criminal” is being publicly raised. The penalty for criminal offences can be jail, although there are many other non-jail penalties. Back in 1995 the Australian Parliament passed legislation stating very clearly that any politician, public servant or political adviser found by the courts to be misleading the public could be jailed for one year. Yet politicians commit that offence on a regular basis in defiance of the law because votes are more important. But the law is there. The first linking of possible criminal offences to corporate actions actually came from a politician...
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Real wages falling for workers, union-commissioned poll finds The Australian 12:00am August 10, 2018 Ewin Hannan   Four out of five workers did not receive a pay rise or endured a real wage cut in the past year, ­according to union-commissioned polling that found low wages growth was set to be a significant ballot box issue for voters at the next federal election. The ReachTel polling of 2453 residents across Australia included 36 per cent who said they would vote for the Coalition at the next poll. Twenty-eight per cent said low wages growth would be the top issue when they voted, and 54 per cent said it would be an important issue. Of those surveyed, 62 per cent, or 1528 people, said they were working. Almost half of those said they had not received a pay rise in the past year, while 33 per cent said they received a wage...
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NAB CEO Andrew Thorburn: 'We do not believe they are criminal' Australian Financial ReviewAug 9 2018 9:03 PM James Frost   NAB CEO Andrew Thorburn says the bank did not act honourably but was not guilty of criminal acts in its wealth and superannuation arms, after another punishing day at the Hayne royal commission. "We do not believe they are criminal acts," Mr Thorburn said. "ASIC has made some claims against us that they suspect we have had some breaches and those are unresolved. They are suspected and not proven." "The point we are making is that we do not believe they are criminal breaches and we certainly do not believe they are criminal acts." Mr Thorburn acknowledged the bank did not act honourably following a third day of evidence from the chairman of its superannuation trustee Nicole Smith, where it was revealed the bank was being investigated for more than...
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Investor mortgage crash to drive house prices lower MacroBusiness 12:02 pm on August 8, 2018 Leith van Onselen   Today’s housing finance data for June, released by the Australian Bureau of Statistics (ABS), posted a large fall in overall finance commitments, led by crashing investor demand. According to the ABS, the total number of owner-occupier finance commitments (excluding refinancings) fell by 0.5% in June in seasonally adjusted terms and was down 5.6% over the year:  The recent rise in FHB mortgage demand has been driven by NSW and VIC, where FHB incentives were implemented from 1 July 2017. FHB commitments were up by 56% and 31% in NSW and VIC respectively relative to June 2017: Next, the below chart tracks the annual growth in the value of finance commitments, and shows that the trend in owner-occupied finance (excluding refinancings) has only recently fallen whereas investor finance commitments are crashing, with total mortgage...
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  Housing credit crunch feared as RBA keeps rates on hold The Australian 12:00am August 8, 2018 Adam Creighton, David Uren   Scott Morrison says the economy faces an “own goal” if the financial services royal commission causes a credit crunch, with his warning coming as the Reserve Bank governor highlighted “changed ­dynamics” in the ­increasingly fragile housing market. The Treasurer said he was ­relaxed about house prices, which are falling in Sydney and Melbourne at an annualised pace of about 5 to 10 per cent, but urged vigilance to avoid a sharp drop in home loan growth. “We must be very careful to avoid that. We are being very careful about that in terms of how we handle the regulatory ­response,” he said at a business lunch in Melbourne yesterday. “There are concerns that the wrong response to what we’re seeing in our banking or financial system could further constrain...
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CommBank relaxed about slow housing, mortgage stress Australian Financial Review Aug 8 2018 8:14 PM Jonathan Shapiro, James Eyers   Commonwealth Bank chief executive Matt Comyn said the softening housing market is "unambiguously a good thing" for the long-term health of the economy as the Reserve Bank of Australia governor dismissed concerns about falling property values, tighter lending standards and rising funding costs.  Mr Comyn offered an upbeat outlook for the economy as he unveiled a 4.8 per cent fall in cash profit to $9.23 billion, saying  "it's actually a good economic backdrop" for a slowing of the housing market to be taking place and "long term we see great prospects in the growth of the Australian economy". With recent data showing Sydney house prices had fallen at their fastest price in five years, driven in part by tighter credit standards, RBA governor Phil Lowe said the economy "needed a period...
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Banks’ policing regime won’t prevent gouging of super nest eggs The Australian 1:08pm August 7, 2018 Anthony Klan   The Federal Government’s announcement of a new policing regime for the major banks and financial institutions will, like so many similar Band-Aid moves before it, do little to zero to correct and prevent the ongoing, systemic gouging of the public’s superannuation nest eggs. The Australian Securities and Investments Commission is to be given an extra $70 million to boost its “policing” activities, including $8m to embed “dedicated staff” within the Big Four banks and AMP: which is precisely the type of window dressing critics were expecting. This is the same regulator which has recently denied it is even responsible for policing the widespread malfeasance in the super sector — which is literally costing the public billions of dollars a year — despite it having, according to its own latest annual report, a...
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AMP's Wilkins tells staff to own mistakes after record outflows Australian Financial Review Aug 8 2018 10:00 PM Joyce Moullakis   AMP has suffered a $5 billion slump in cash inflows in its core Australian wealth management business over the latest half year because of damage to its brand from disclosures at the Hayne royal commission. In its first results since the bruising commission appearances and subsequent management turmoil, the AMP revealed net outflows for the half year amounted to a record $873 million. The numbers illustrate the scale of the task facing the troubled wealth manager to reestablish its reputation. In a step towards that goal, acting AMP chief executive Mike Wilkins laid down a new staff mantra to own and fix any mistakes and restore the group's tarnished image and earnings. But he refused to follow rivals that have stopped paying trailing commissions to advisers on legacy products. His...
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Greens want Australia's banks broken up over 'shocking degree of rot' The GuardianWed 8 Aug 2018 04.00 AEST Paul Karp   Australian financial institutions including the big four banks would be forced to break up their businesses and perform just one of four key functions in a radical Greens plan to increase competition. The plan would force Westpac, ANZ, NAB and the Commonwealth Bank to divest their wealth management arms while Westpac’s BT Financial Group, AMP and MLC would be broken up separating superannuation, insurance and wealth management functions. The Australian Competition and Consumer Commission would also gain a larger role under the plan, taking responsibility for consumer protection and joining the Council of Financial Regulators. The Greens cite the “shocking degree of rot” in financial institutions uncovered by the banking royal commission as inspiration, but the policy significantly front-runs the commission and other major parties. The Greens were the first...
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Banking royal commission: NAB put on criminal charge alert The Australian 12:00am August 9, 2018 Ben Butler, Michael Roddan   National Australia Bank may face criminal charges over a probe by the corporate regulator into the company’s “suspected offending”, amid revelations the lender charged fees of more than $3 million to dead people. Financial services royal commissioner Kenneth Hayne also raised the prospect that NAB’s taking of money “to which there was no entitlement” for services it never provided might be a crim­inal offence during an at-times torrid day of hearings yesterday. The proceedings also laid bare NAB’s unsuccessful attempts to convince the Australian Securities & Investments Commission that it should not have to pay full compensation to customers slugged with fees for which they received no service, and revealed the slow pace at which it moved other clients out of old high-fee funds into a cheaper ­option, as ­required by...
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First competition regulator chief backs Green bid to break banks The Australian 12:00am August 9, 2018 Adam Creighton   The inaugural head of the competition regulator, Allan Fels, has called for a radical overhaul of bank regulation and structure, backing the Greens’ push to break up the major banks and AMP to curb gouging of customers and hidden subsidies to investment banks. Revealing his “astonishment” at the revelations at the royal commission, Professor Fels, who chaired the ­Australian Competition & Consumer Commission from its inception in 1995 to 2003, said “deep structural conflicts of interest” would overwhelm piecemeal ­efforts to curb unethical behaviour. “There are inherent conflicts and it should be obvious they won’t be resolved by better behaviour by banks or better management by regulators,” he said. “I’ve been surprised, astonished, at the extent of unethical behaviour and it indicates to me banks can’t be trusted to deal with these...
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Banking royal commission: Richard Di Natale calls for bank execs who commit crimes to face jail The Australian 2:29pm August 8, 2018 Michael Roddan   Greens leader Richard Di Natale has called for “lengthy criminal sentences” for banking executives who commit crimes and slammed the conflicts of interests that reward bankers for charging fees to customers where no service has been provided. Speaking outside the Federal Court in Melbourne, where the royal commission is grilling National Australia Bank executives who charged millions in fees to superannuation customers in return for little or no benefit, Mr Di Natale said there was “a cancer at the heart” of the banking and financial services sector.  “The foundations are completely rotten,” Mr Di Natale said. The press conference came just moments after royal commissioner Kenneth Hayne raised the prospect that National Australia Bank may have committed a crime by taking money from superannuation customers to...
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ASIC funding boost to put 'supervisors' in big banks, AMP Australian Financial Review Aug 7 2018 12:18 AM James Eyers   ASIC staff members will be embedded inside the major banks and AMP to supervise governance and compliance under a new, proactive approach to enforcement being implemented by its chairman James Shipton, which the government has backed with $70.1 million in additional funding. After the Australian Securities and Investment Commission's funding was reduced by $26 million in this year's federal budget, the government will announce more money for the corporate regulator on Tuesday, including $8 million over the next two years so it can adopt a "new supervisory approach" that will see dedicated staff assigned to monitor the five financial institutions. The more aggressive approach comes after Treasurer Scott Morrison said on Friday the concept of putting a "principal integrity officer", with a positive duty to report misconduct to regulators like...
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Hayne royal commission: NAB had 'commercial concerns' about ending commissions Australian Financial Review Aug 6 2018 6:51 PM Joanna Mather   National Australia Bank devised a strategy to continue charging the types of commissions banned under the Future of  Financial Advice laws, the banking royal commission heard. In July 2016, five NAB super funds were merged into one to create the MLC Super Fund. Earlier, NAB executives sought ways to transfer customers to the new arrangements without relinquishing the capacity to charge "grandfathered" commissions. Former executive Paul Carter agreed there were "commercial concerns" in relation to revenue. But he insisted NAB was also worried about angering financial advisers, who might withdraw their clients. The fund's assets would be depleted, which could in turn leave members worse off, Mr Carter said. Counsel assisting Michael Hodge was unconvinced. He asked whether the bank might have been more concerned about fee revenue than clients....
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APRA needs to be held to account on superannuation fund performance Australian Financial Review Aug 5 2018 11:00 PM Adele Ferguson   A multibillion-dollar Commonwealth superannuation fund whose 137,350 members include public servants, defence personnel, SES officers and some former politicians, has been labelled a rip-off, opaque and not acting in members' best interests. Former Labor politician Mark Bishop, who chaired a landmark Senate inquiry into Commonwealth Bank that called for a royal commission back in 2014, said the fund makes the banks look like angels. Since he joined the $12.5 billion Public Sector Superannuation Accumulation Plan(PSSAP) last September he was put into a default insurance scheme he didn't know he was in – and didn't need - which has been deducting a whopping $774 a fortnight in income protection premiums. In July 2018 he checked his account balance (not for the full year) and noted it was $9000 less than...
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Super industry veteran slams Westpac’s ‘amazing deception’ The Australian 12:00am August 6, 2018 Anthony Klan   The founder of one of the nation’s biggest superannuation platforms has described Westpac’s moves to slash its fees for new members for its BT Panorama product as an “amazing deception” that does little to nothing to help members of the public who sign up. Super industry veteran Bruce Tustin, founder of Oasis Asset Management and its chief executive until the group was taken over by ANZ, said the moves by Westpac’s BT were a “myth” and it had “simply hidden the highest of the fees in the fine print”. “Even in light of the royal commission seeking greater transparency, Westpac’s BT have come out with the most amazing deception I have seen and advertised it on many full page ads in the (Australian) Financial Review,” he said. BT’s announcement two weeks ago, he said, “on...
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Self-regulation is code for bank misbehaviour The Australian 12:00am August 4, 2018 Alan Kohler   The first rule of self-regulation via a code of conduct is that those who need it will ignore it, and those who read and follow it didn’t need it. Rule No 2 is that the purpose of self-regulation is to stop regulation by someone else, not actually to regulate. The self-regulation under discussion is the Australian Banking Association’s 25-year-old Code of Banking Practice, which must go down as one of the great triumphs of the genre in history. It’s not too often an industry that’s subject to a strict and longstanding moral code cops a royal commission, and one that so quickly turns out to be so well-deserved. The 2019 banking code of practice, released this week, updates a succession of codes that began in 1993, with the benefit of an independent review by Phil Khoury...
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