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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Big four banks hit back at 'misconduct' claims By Clancy Yeates & Sarah Danckert    6 April, 2018   The big four banks have strongly rebuffed claims of "misconduct" over a series of incidents in their consumer lending businesses, in response to the first round of hearings into the sector's behaviour. ANZ Bank, Commonwealth Bank, National Australia Bank and Westpac have addressed the arguments put by counsel assisting, Rowena Orr, for royal commissioner Kenneth Hayne to make a range of misconduct findings against the banks. Submissions released from the banks on Thursday showed the big four challenged many of Ms Orr's arguments that the banks had breached their duties to customers. NAB said in its response that the royal commission should not find the bank engaged in misleading and deceptive conduct through its introducer mortgage referral program. NAB said the royal commission had not properly identified the conduct that gave rise to the finding. "The...
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ANZ to pay $3m after ASIC investigation Clancy Yeates ANZ Bank will pay $3 million and has pledged to overhaul processes in its financial advice business after failing to give more than 10,000 customers annual reviews of their investments. The Australian Securities and Investments Commission (ASIC) said ANZ had also agreed to compensate its Prime Access customers who did not receive the documented reviews they had paid for between 2006 and 2013. The bank has so far paid $46.81 million in remedies, with total compensation estimated to be $46.85 million. ANZ's commitment comes as the royal commission is set to put other financial advice businesses under the microscope for failures to provide customers with all of the services they paid for. The first case studies in the next round of public hearings, kicking off on April 16, will focus on failures of Commonwealth Bank and AMP to provide customers with all financial...
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Royal Commission will shred reputations but not profits   https://www.euromoney.com/article/b17mxb2bbz81gz/royal-commission-will-shred-reputations-but-not-profits   Published on: Friday, April 06, 2018 The likely recommendations from Australia’s investigations are changes that should have been made years ago. The early skirmishes in Australia’s Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry suggest that banks are not in for an easy time.  The tone was set in March when Rowena Orr QC gave two banks, Commonwealth Bank and National Australia Bank (NAB), a firm dressing down for failing to do their homework properly in the submissions they were required to lodge.  In a tone worthy of the sternest headmistress, she told off NAB for “failing to grapple with the task” it had been set.  The whole thing will be a public relations nightmare for the banks, but where ultimately is it taking us?  The bulk of what’s under scrutiny is at the retail end of town in the name of...
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Memo Greens: we already have People’s Banks in the real world Sydney Morning Herald 6 April 2018 3:41pm Michael Pascoe   The Greens’ whacky “People’s Bank” thought bubble has been broadly – though not unanimously – trashed on macroeconomic grounds. What’s been largely missed is the left-wing populists trashing Australia’s real people’s banks, the ones that actually work in the real world with real people. If the Greens desperately want to punish the Big Four banks for sundry misdeeds, you’d have to assume they are already banking with Australia’s many fine APRA-supervised, RBA-backed mutual-owned banks, credit unions and building societies. The Big Four have around 80 per cent of the housing market. Instead of backing the alternatives, educating the public and working on policy to level the playing field, the Greens want to introduce a tiny extra player more likely to steal ideologically-driven customers from the mutuals than the big banks....
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ANZ agrees to lift wealth management game Australian Financial Review Apr 6 2018 12:41 PM James Frost   ANZ Banking Group will pay $3 million and submit to regular independent reviews of its systems and processes after charging thousands of wealth management clients for a service they never received. The Australian Securities and Investments Commission published the terms of an enforceable undertaking with the bank on Friday morning, which revealed refunds to 13,000 of the bank's wealth management customer is forecast to reach $47.9 million. The bank had previously estimated the issue affected 8000 customers and would cost $30 million. ANZ customers who had signed up to the Prime Access wealth management offering paid for and were entitled to documented annual reviews but did not receive them. The issue affected customers who signed up to Prime Access Connect, Prime Access Essentials and Prime Access Tailored. ANZ said the issue began as...
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Ian Narev’s CBA legacy: big returns and big problems The Australian 12:00am April 7, 2018 Richard Gluyas   From Monday, when he slides his feet under the chief executive’s desk at Commonwealth Bank, Matt Comyn will be peppered with the same question asked of his predecessor: what do you want your legacy to be? Ian Narev, who left the building on Friday, used to answer: “I just don’t think that way.” Perhaps it’s just as well. While Narev’s six-year tenure has been marked by sector-leading financial returns, it will be remembered for an extraordinary sequence of missteps, misconduct and misdirected energy, often exacerbating the pain already suffered by CBA’s customers. In a short video and note to staff this week, Narev had no option but to confront the unpleasant truth. “Legacies are not about individual leaders; they’re about collective achievements,” he said. “Regrettably, they are also at times about failure. “Recently...
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David Murray says banks should persevere with wealth management divisions Australian Financial ReviewApr 6 2018 11:00 PM Joyce Moullakis   David Murray, the architect of Commonwealth Bank of Australia's push into wealth management almost two decades ago, says the mooted retreat from the industry by several major banks is the wrong decision. Mr Murray, who led CBA for 13 years until 2005, this week said while the nation's banks were navigating a number of issues, including the royal commission and tougher capital requirements, that did not warrant an exit from wealth and funds management. "That's my preference, but others see it differently," Mr Murray, who also was chairman of the Financial System Inquiry, told The Australian Financial Review Banking & Wealth Summit. "It's a toss-up inside the banks about the future of customer relationships on one hand and some prudential issues on the other. "If you think about the extent of...
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Brokers - Sellers NOT to blame for dodgy fraudulent Interest Only Mortgage Loans: Blame the Engineers at the Major Banks.  Blame the Corrupted Regulators Denise L Brailey  7th April, 2018 The Royal Commissioner has been asked to look at the delivery of Bank driven "Financial Advice and "Financial Strategies" that have caused so much distress to ordinary Australians during the past two decades. Reports handed in to the RC by Major Banks and the Australian Securities and Investment Commission ("ASIC") are expected to blame the sellers.  ASIC has not been forthcoming in their explanations of the Mechanics of these frauds in lending.  The Government pays ASIC half of what is received for ASIC minding the corporate database acting as a corporate librarian: approx $450 million annually to report to Treasury each month. Shortly, the Turnbull Government will change the system of payment and ask the Banks to pick up the cost of running...
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ASIC chairman James Shipton warns banks to come clean Australian Financial Review Apr 5 2018 4:18 PM James Eyers   The corporate regulator wants banks to improve the speed of reporting legal breaches, after the Hayne royal commission highlighted that banks had failed to file "breach reports" within the timelines set down by the Corporations Act. The new chairman of the Australian Securities and Investments Commission, James Shipton, told the second day of The Australian Financial Review Banking & Wealth Summit that when it comes to reporting problems, "at its core, this requirement relies on participants identifying breaches and reporting them quickly". "It is a core part of our regulatory system that allows us to identify both individual breaches as well as broader themes so that we can respond appropriately," he said. "We will take very seriously any incidents where there has been a failure to report." Mr Shipton urged banks...
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Royal commission: Banks reject breach findings, admit conflicts in broker pay Australian Financial Review Apr 5 2018 11:00 PM James Frost   The big four banks have made a series of highly limited admissions in submissions made to the Hayne royal commission but largely rejected findings of misconduct put to Commissioner Kenneth Hayne by counsel assisting Rowena Orr, QC. The Hayne royal commission invited parties given leave to appear – including banks, regulators and case studies – to respond to the scorching dressing down of the big four banks delivered by Ms Orr at the conclusion of the first two weeks of public hearings. Among her findings were multiple instances of misconduct, breaches of the law and widespread failures to meet community standards and expectations. The banks, however, have almost unanimously rejected her findings in their responses. Commonwealth Bank rejected Ms Orr's argument that the arrangements the bank had with its...
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Banking royal commission may trigger credit crunch, flatten house prices Australian Financial Review Apr 5 2018 6:01 PM James Frost   One of Australia's biggest lenders has warned against a return to manual home loan assessments saying it would raise interest rates while a leading bank analyst has warned of a looming credit crunch. Westpac CEO Brian Hartzer told attendees at The Australian Financial Review Banking & Wealth Summit said any move to step back from automated decision making would be an overreaction and have immediate impact on borrowers. "It's going to have a consequence for cost and efficiency. It's going to have a consequence for the availability of credit and that is most likely going to hit the people who are at the lower end of the spectrum," Mr Hartzer said. The spectre of tighter lending standards has been flagged by the Hayne royal commission which spent two weeks exploring...
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https://www.accc.gov.au/speech/synchronised-swimming-versus-competition-in-banking  Rod Sims on why the banks are a cartel (except he won't say 'cartel') Extract from ACCC Chairman Rod Sims’ speech at the AFR Banking and Wealth Summit today. Sounds to me like a pretty good description of a cartel:  … Internal documents reviewed by the ACCC reveal a lack of vigorous price competition between the five Inquiry Banks (ANZ, Commonwealth, NAB, Westpac and Macquarie), and the big four banks in particular. In fact, their behaviour more resembles synchronised swimming than it does vigorous competition.  What we found is that the pricing behaviour of the Inquiry Banks appears more consistent with ‘accommodating’ a shared interest in avoiding the disruption of mutually beneficial pricing outcomes, rather than vying for market share by offering the lowest interest rates.  This manifests in at least four ways:  The big four banks largely focus on each other when they determine headline interest rates and discounts...
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  The Treasurer Scott Morrison and APRA’s Wayne Byres might point out the wrongdoing Commissioner Kenneth Haynes’ Royal Commission is exposing ‘is going over old ground’ that they described at AFRs Comprehensive Banking & Wealth Summit  Scott and Wayne would do worse than meet those ripped off customers, like myself. I have found no avenue to seek ‘access to justice’ or a fair or reasonable outcome from all the reviews, investigations and inquiries undertaken over the years  My direct coal-face experience with 22 Senior Managers inside CBA is to continue to see them kicking the can down the road. For all the talk, culture inside CBA, has not changed for the better in my cases 9 year duration. CBA are a pure disgrace given the extent they go to CoverUP fraud and forgery I have shown them.  CBA have refused every request for mediation and refused Financial Hardship through the 9...
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BFCSA: How arrogant is Treasurer Morrison? "The Government knew about, Big Bank Bad Behaviour! Nothing New" Nothing new in bank royal commission revelations: Scott Morrison Australian Financial ReviewApr 4 2018 6:33 PM Aaron Patrick   The banking industry royal commission hasn't uncovered bad behaviour that the government didn't know about, Treasurer Scott Morrison said, raising doubts about the usefulness of an inquiry that could cost the economy half a billion dollars. Mr Morrison said government agencies had already started dealing with the problems identified by commissioner Kenneth Hayne, which include low-level corruption, kick backs and poor lending standards. No top bank executive has lost their job because of information exposed by the inquiry, which will cost each of the big four banks an estimated $100 million each, mostly in legal fees, and could cost the government $70 million. "Other agencies certainly have addressed many issues being raised. I think that will...
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Reserve Bank of Australia anxious on Trump's borrowing binge John Kehoe   Reserve Bank of Australia governor Philip Lowe errs on the side of caution when commenting on politics, so it was notable that he expressed veiled concerns about US President Donald Trump's policies in Tuesday's prepared statement on local monetary policy. The politically astute Lowe, of course, did not explicitly mention Trump by name. It would be an odds-on bet that the volatile President's international shockwaves from binge borrowing and China trade tensions were discussed behind closed doors at Sydney's Martin Place when RBA board members met this week and opted to hold the overnight cash rate steady at 1.5 per cent. The best new insight from Lowe's statement was his noting of the "tightening of conditions in US dollar short-term money markets, with US dollar short-term interest rates increasing for reasons other than the increase in the federal funds...
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CBA rushed to shut down junk insurance The Australian 12:00am April 4, 2018 Michael Roddan   The banking royal commission’s focus on junk insurance sold by Commonwealth Bank sparked sudden deliberations between new chief executive Matt Comyn and the bank’s retail product manager about how to stop selling the product. Documents tendered to the royal commission reveal the internal discussions between the fledgling chief executive and Clive van Horen, executive general manager of retail products, who were forced to quickly announce the closure of its troublesome consumer credit insurance business ahead of hearings for Kenneth Hayne’s royal commission. An email from Mr van Horen to Mr Comyn, then in his last weeks as head of the retail division at the nation’s largest bank, reveals the bank quickly reacted to a witness statement submitted to the royal commission by an aggrieved customer who was sold useless credit card insurance by a branch...
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AUSTRAC chief denies CBA was blindsided on money laundering allegations Australian Financial Review Apr 4 2018 2:58 PM Joyce Moullakis   AUSTRAC chief Nicole Rose has signalled a preference to settle legal matters out of court, as the agency prepares for mediation with Commonwealth Bank of Australia over a spate of allegations it facilitated money laundering and terrorist financing. Speaking at The Australian Financial Review Banking & Wealth Summit on Wednesday, Ms Rose shied away from directly commenting on the CBA legal case but rejected the bank's claims it had been blindsided by some of AUSTRAC's allegations to the court. "I don't believe that's AUSTRAC's point of view," she said. "It would be unusual for them to be surprised by such serious enforcement action. Of course there are always incidents where law enforcement, under cover come across criminal behaviour that we may not have been aware of." Ms Rose was responding...
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APRA chairman Wayne Byres reveals flaws in banker pay Australian Financial Review Apr 4 2018 12:06 PM Jonathan Shapiro   The chairman of the prudential regulator says pay structures of executives at the nation's largest institutions have allowed them to avoid punishment for poor outcomes, undermining efforts to ensure financial stability. The "carrots are large and the sticks are brittle" for senior executives, Australian Prudential Regulation Authority chairman Wayne Byres told The Australian Financial Review Banking & Wealth Summit as he announced a review executive remuneration of 12 financial institutions. "Not only are rewards generous, but there are seemingly few repercussions for poor outcomes," he said in a keynote address. The review covered 280 senior roles across the banking, insurance and superannuation sectors between 2014 and 2016. Mr Byres said there was "considerable room for improvement". Lack of accountability "There has been limited evidence of material financial consequences for senior executives...
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Round Two: Financial advice from banks, AMP to fall under Hayne’s steely eye The Australian 12:00am April 4, 2018 Richard Gluyas   The financial services royal commission has drawn up an extensive list of agenda items for its second round of public hearings on financial advice and all the major banks and AMP are to be fed through the wringer. The hearings, to be held from April 16 to 27, will consider: the conduct of financial services ­entities that provide financial advice to consumers; compliance with the law and community ­standards; and the adequacy of the current legal and regulatory structure. The Australian Competition and Consumer Commission, as well as the two professional ­organisations for financial planners and the privately owned Dover dealer group with an estimated $3 billion in funds under management, will give evidence on the profession’s disciplinary regime. National Australia Bank and ANZ Bank, along with its Millenium3-aligned...
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New ASIC Chief Shipton: "Bankers aren’t Knights of the Round Table." Cricket penalties for the finance sector - now that would be news The Australian 12:00am April 2, 2018   Adam Creighton   The contrast with the corporate world couldn’t be greater. Indeed, if the cricket world penalised wrongdoing in the same way corporate cheating is treated, cricket fans themselves would have copped the fine for ball tampering. When business people cheat, the companies they work for are punished, which is a weak disincentive. Blaming companies ­obfuscates bad individual behaviour. Fining companies punishes shareholders. If the cricketing framework were applied in financial services, for instance, a royal commission into misconduct wouldn’t have happened. It’s a pity the cricket saga ­exploded a few weeks after James Shipton’s first speech as head of the corporate watchdog ASIC, where he lamented a growing “trust deficit” in finance. “There are high levels of trust in...
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