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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Australia shirking on foreign aid: Tim Costello The Australian 10:50am April 2, 2018 Rachel Baxendale   World Vision Australia chief advocate Tim Costello has called for Australia to lift our foreign aid funding ahead of the May federal budget, warning that the books are being balanced at the expense of the world’s poorest people. With foreign aid levels at their lowest in Australia’s history, Foreign Minister Julie Bishop has dismissed reports that the Department of Foreign Affairs and Trade has modelled cuts, saying there will be no reduction to foreign aid. Mr Costello said he was “very concerned” by the modelling. “I’m very reassured by Julie Bishop saying that,” he told ABC radio. “What Australians maybe don’t understand is that we cut aid, Australian aid, by $11 billion in the (2014) Abbott-Hockey budget. “In other words, 20 per cent of all the savings they made in that budget came from the...
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APRA rejected CBA home loan data as inaccurate and incomplete Australian Financial ReviewApr 2 2018 11:00 PM James Frost   Commonwealth Bank was being pressured by the prudential regulator to appoint external consultants and fix its flawed home lending data almost 2½ years before the Hayne royal commission began exposing the big four for sloppy administrative errors and irresponsible lending. The Australian Prudential Regulation Authority's frustration with the failure of Australia's biggest home lender to accurately identify what proportion of its loans were taken out by property investors and its level of exposure to big borrowers has been revealed in evidence tendered to the banking royal commission and published in a massive dump of more than 100 documents late last week. A confidential internal catalogue of risks prepared for Commonwealth Bank's board in July 2016 shows the bank was dealing with a spiralling list of concerns ranging from poor data controls...
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Banking Royal Commission exposes shocking corruption – but must be extended two years -    Deregulation has helped parts of the financial industry to become captured by fraudsters. Faked pay slips, forged documents and cash-stuffed envelopes used as bribes to secure loans are just some of the examples of dodgy practices exposed so far by the banking royal commission. But before you think “some people will do anything to get a mortgage”, it’s crucial to remember that the people creating and engineering these frauds were actually at the top of the banking system.  The evidence paints a picture of an industry captured by people being recruited by Major Banks to sell what looked like innocent mortgages on commission-driven schemes to dish out ever bigger mortgages to borrowers who cannot afford them.   Over 80% of the loan books are Interest Only loans.  If you think that we are immune from the United States GFC Crash and...
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   FOR THOSE WHO WISH TO READ THIS EXTRAORDINARY REPORT - THE PLAN TO GIVE THE BANKERS THE GREEN LIGHT TO RUSH INTO SUB PRIME LENDING IN AUSTRALIA in 2001 and then the  2003 REPORT https://coolabahcapital.files.wordpress.com/2016/10/2003austpmtaskforcereport-1.pdf There is Volume 2 and 3  in this link........................  Denise Brailey...
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ASIC REPORT 59 Equity release products November 2005    Equity release products http://download.asic.gov.au/media/1337312/Equity_release_report_exec_summary.pdf   Page 8  - Regulation   Products The existing regulatory system was not designed  to address the issues raised by equity release products,which take the form of a credit arrangement but neverthelesshave some of the attributes of an investment product.   At the product level, the principal vehicle for regulation of credit, the Uniform Consumer Credit Code (UCCC), does not provide for disclosure of risk, nor provide a mechanism for disclosing elements of the cost of the product, such as the forgoing of equity, that are not translatable into an interest rate. Finally it will not apply at all where the funds obtained are to be used for investment purposes.   The principal vehicle for the regulation of investment products, the Corporations Act 2001 (Corporations Act), has limited application to some home reversion and shared appreciation products, depending...
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Summary of Findings for The Prime Ministerial Task Force on Home Ownership Vol. 1, 2 & 3 Reports Commissioned by The Menzies Research Centre for the Prime Minister’s Home Ownership Task Force Christopher Joye (Cambridge University), Andrew Caplin (New York University), Peter Butt (Sydney University), Edward Glaeser (Harvard University), Michael Kuczynski (Cambridge University), Joshua Gans (University of Melbourne), Stephen King (University of Melbourne), David Moloney (Booz Allen & Hamilton) and Alastair Bor (Booz Allen & Hamilton)   Chairman’s Preface The three reports published herein have been commissioned by the Menzies Research Centre as part of its Home Ownership Task Force which was undertaken at the suggestion of the Prime Minister in September 2003. No part of the Australian dream is more instinctively human than the desire to own our own home. In recent years, however, that worthy ambition has become harder for many Australians to attain. This is not a function of...
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HOW MALCOLM TURNBULL HELPED PUMPED UP JOHN HOWARD'S HOUSE PRICE BUBBLE   THIS IS THE SUMMARY OF THE 2003 REPORT “…it makes no sense whatsoever for the average Australian family to have to tie up over two-thirds of all their wealth in the world in one highly illiquid and very risky asset: viz., the owner-occupied residence. …we find that one in four families lose money (in real terms) when they come to sell the roof over their heads. For roughly one in ten dwellers, the situation is even more dire – these poor souls are subject to real price declines in excess of 13.4 percent.” – Summary of Findings for The Prime Ministerial Task Force on Home Ownership, 2003 Australian economics and political forums are full of good-hearted, well-meaning types, who argue passionately, and often cogently, for the need for policy changes to enable lower house prices. Criticism of the Howard Government’s...
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How Malcolm Turnbull helped pump Howard’s House Price Bubble https://barnabyisright.com/tag/malcolm-turnbull/  Click the LINK and read the LIST OF NAMES   Page 12 For centuries now, businesses in need of funds have been able to avail themselves of both debt and equity. Yet for households who aspire to expand, mortgage finance has been their one and only option. And so, despite the ever-growing sophistication of corporate capital markets, consumers around the world are forced to use only the crudest of financial instruments.3 3 This begs the question as to the absence of equity finance in the first instance. One answer instantly offers itself: securitisation. In the past, it was not practicable for a single unsponsored entity to go around gobbling up interests in individual properties in the vain hope that they could bundle these contracts into something that would look like a regulated holding. Fortunately, there has been spectacular progress of late...
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APRA faces pressure on liar loans The Australian 12:00am March 29, 2018 Michael Roddan   The banking regulator has repeatedly dodged questions from politicians who want to know why it overlooked “systemic” risks in the mortgage lending sector that have been uncovered in the first two weeks of the royal commission. Appearing before the powerful House of Representatives economics committee yesterday, APRA chairman Wayne Byres said much of the bad behaviour unearthed during the first two weeks of formal hearings at the royal commission fell under the responsibility of the corporate regulator, the Australian Securities & Investments Commission. Liberal MP Sarah Henderson, chair of the economics committee, asked Mr Byres repeatedly whether the Australian Prudential Regulation Authority could have been doing “a better job” of monitoring questionable behaviour including mortgage fraud at the nation’s major banks. Mr Byres said APRA was not responsible for policing much of the conduct at the...
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ASIC builds more legal muscle, with Daniel Crennan appointed enforcement commissioner The Australian 1:28pm March 28, 2018 John Durie   Daniel Crennan’s appointment as ASIC deputy chair has attracted wideranging support for both his own credentials and the concept of bringing external commercial legal experience into the regulator. The QC’s appointment, together with other changes introduced by Financial Services Minister Kelly O’Dwyer, came as the corporate plod updated its budget for this financial year with a bill of $238 million to be paid for by industry, depending on how much of its time is taken up looking after the sector. ASIC will be funded roughly two thirds by industry and the rest by government, with a direct levy on the different sectors. By way of example listed companies will have to pay $33.9 million, which works out at around $4,000 each, while banks will have to pay at least another $22.6...
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Corporate debt, interest rates and political uncertainty spook global markets Australian Financial Review Mar 28 2018 4:30 PM Karen Maley   How's this for a toxic cocktail for global sharemarkets? Take high levels of corporate leverage, add in rising interest rates and a large dollop of political uncertainty, and it's a recipe guaranteed to shake investor confidence. Let's take each of these ingredients in turn. Close to a year ago, the International Monetary Fund warned that US corporate debt had ballooned to levels exceeded those prevailing just before the global financial crisis, as US firms had taken advantage of ultra-low interest rates to load up on debt. The IMF warned that elevated corporate debt levels could cause problems down the track, as the US central bank continued to push short-term interest rates higher. But the warning went completely unheeded, as easy credit conditions spurred a fresh round of corporate debt raising...
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Project Group collapse just the first of many in overheated market, subbies warn Australian Financial Review Mar 28 2018 2:25 PM Michael Bleby   The collapse of builder Project Group is the first of many to come in the overheated Victorian construction market, according to subcontractors membership group Subbies United. Conditions that triggered Melbourne-based Project Group to go into voluntary administration last week, such as fixed fees and rising costs, were catching up with head contractors and would trigger the failure of other companies, Subbies United adviser Rob Berry said. "I think it's the start of many," said Mr Berry, who estimated Project Group's debts would more than double from the administrator's preliminary estimate of $22 million to about $50 million. "Prices are escalating. [Builders] are on a fixed-contract price. Their margins are disappearing and going into negative margin and it's catching up with them." The construction industry failures that had,...
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CBA report detailed compliance issues with Aussie Home Loans The Australian 12:00am March 28, 2018 Richard Gluyas   An internal Commonwealth Bank audit report last year identified a range of compliance issues with the bank’s Aussie Home Loans business, including a failure to ­enforce key CBA policies that the broker was contractually bound to observe. The nine-page report, which was released as an exhibit yesterday by the financial services royal commission, rated the control ­environment for Aussie as “marginal”, or unchanged since 2014. While the report recognised that CBA management under home-buying boss Dan Huggins was taking “significant” steps to improve assurance activities, it said the assessment should extend to employee due diligence, customer identification requirements including “know your customer”, and various assurance procedures over individual brokers. “Home buying do not have sufficient oversight of aggregators to confirm they are meeting key legislative requirements they are required to perform on behalf...
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'Systemic risks': RBA hits back on housing loan speed limits Sydney Morning Herald 27 March 2018 1:59pm Clancy Yeates   The Reserve Bank has hit back at criticism of the regulatory crackdown on the home loan market, saying such curbs were needed to contain "systemic risks" caused by a slide in lending standards. The Productivity Commission last month took aim at speed limits imposed on lending to property investors in 2014, and 2017 caps on interest-only lending, saying the policies were a "blunt intervention with detrimental effects on market competition". The commission's draft report on competition in finance said regulators were putting too much emphasis on stability, and argued the watchdog's loan caps had boosted big bank profits while making it harder for smaller banks to compete. In a submission to the commission lodged last week, the RBA stood by the loan caps - known as "macroprudential" policies - which have...
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Just how shabby are the big banks' loan books? Australian Financial ReviewMar 27 2018 5:33 PM Karen Maley   Bank shareholders, many of whom have followed the Hayne royal commission's public hearings with avid interest, remain deeply divided about one key question: Are the banks' poor lending practices confined to small pockets of their loan books, or is a sizeable chunk of the banks' assets of dubious quality? Unfortunately, senior executives at the big four banks proved to be of little help in answering this question. They are so petrified of attracting the attention of the Hayne royal commission, and of possibly being called to testify before it, that none were prepared to comment on the record about the quality of their loan books. The National Australia Bank showed the most courage, telling The Australian Financial Review that a NAB spokesperson could be quoted as saying that "we are comfortable with...
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Royal Commission spotlights the mortgage fraud that could implode the banking system In its first fortnight of hearings, the Banking Royal Commission drew the nation’s attention to the huge problem of mortgage fraud. The hearings showed that each of the big four banks, which together control 80 per cent of banking in Australia, have engaged in fraud on a massive scale. The fraud is not confined to the margins of the home loan business, but infects the majority of mortgages, which means most borrowers can’t afford their loans. The bottom line is there is nothing real propping up the Australian housing market—it is a bubble of lies, and it would only take a slight shock to burst the bubble and bring down the entire banking system. Until now, a small number of individuals and organisations, including the Citizens Electoral Council, have been warning of this danger. The Royal Commission has forced...
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Top reasons the Banking Royal Commission must investigate APRA The terms of reference that Malcolm Turnbull gave to the Banking Royal Commission only allow it to examine specific failings of regulators in relation to banking misconduct. It is not allowed to examine “macro-prudential policy”, which is the regulatory structure of the financial system, and the policies of the Australian Prudential Regulation Authority (APRA), the bank regulator. Issued with the approval of the banks and regulators, Turnbull’s terms of reference are clearly intended to hobble the Royal Commission and protect the banks. Here are the top reasons why Australians should demand that the Royal Commission be allowed to investigate APRA and the regulatory structure of the banking system. APRA is the supervisor of the banks, and their atrocious abuses occurred under its supervision. Numerous experts and bank victims who have interacted with APRA accuse it of protecting the banks, not policing them. APRA is...
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BFCSA: Sneaky Tony - Treasury forced to answer CEC and experts on bail-in bill. A POX on this Government! "Not our Intention but we can GRAB YOUR CASH if we want..." Tony Abbott & only several others passed this bill as everybody else slept all against objections of a Tasmanian politician, an ex banker, who fully understood the ramification of such a bill. The full story from CEC here:                 http://cecaust.com.au/releases/2018_02_16_Govt_APRA.html The government and regulators have been forced to answer objections raised in the flood of public submissions on the APRA “bail-in” bill. The Senate Economics Legislation Committee, which received more than 1,000 submissions to its inquiry into the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Bill 2017, put a series of questions to the Treasury, Reserve Bank (RBA), Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC), based...
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NAB knew regulatory ‘risks were high for months’ The Australian 12:00am March 27, 2018 Ben Butler   National Australia Bank gave ­itself a “red”, or high, rating for regulatory and compliance risk for “many months” in 2015, according to bank board minutes released last night by the royal commission into financial services. Minutes of the principal board risk committee meeting also reveal issues, including $780 million on loan to debt-laden Anglo-Swiss miner and commodities trader Glencore, findings of “non-compliance” against the bank by anti-money laundering and counter-terrorism finance watchdog Austrac and inadequate disaster recovery plans for its data centres. The minutes of the meeting held at NAB’s Docklands headquarters in Melbourne at 8.10am on November 4, 2015, are among a cache of documents relating to a home loan bribery scandal among bank managers in western Sydney that was dealt with at the commission’s public hearings over the past fortnight. NAB initially failed...
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New CBA boss Matt Comyn executes purge of Narev old guard Australian Financial Review Mar 26 2018 6:04 PM James Eyers   Commonwealth Bank of Australia's new CEO Matt Comyn has executed a purge of Ian Narev's old guard as he works to restore the bank's battered reputation with sweeping changes to the senior management ranks leaving an unprecedented five group executive roles vacant. Kelly Bayer Rosmarin, group executive of institutional banking and markets, who was in the running for CEO but missed out to Mr Comyn, and David Whiteing, group executive of enterprise services and chief information officer, will be leaving CBA it was announced on Monday, along with Melanie Laing, group executive of human resources. Five of the top 13 executives at CBA, which is embroiled in a money laundering scandal and facing heat at the Hayne royal commission, will have departed since the AUSTRAC proceedings were filed last...
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