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BFCSA: Peter Kell under questioning in the Senate re ASIC's part in Low Doc Scandal

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Read Hansard:  This is from August 2012:  PETER KELL current Deputy Chair of ASIC



 I might also note that we recently secured $3.3 million in refunds for RHG customers who had been charged exit fees in excess of levels that ASIC considered to be legally permissible

 Senator CAMERON: There have been significant claims made about the behaviour of banks and allegations of criminal behaviour. Is ASIC currently investigating any of these claims?

 Mr Kell: If you do not mind, I would not mind providing a bit of a context around ASIC's approach to low doc loans to get to that particular question............ASIC published reports and took actions prior to that time, most notably it published a report on mortgage broking in 2005 and a report in 2008 called Protecting Wealth in the Family Home, which identified concerns with the abuse of low doc lending and associated misconduct by brokers........NO MENTION OF EARLIER ASIC REPORTS??? HE SAYS NOTABLY

Senator CAMERON: That is a prepared statement you are reading from. Is it available?

Mr Kell: Some of it is, not all of it.Mr Saadat: The court, at the first instance, held that the conduct was unconscionable but on appeal it was held that the conduct was not unconscionable. The borrowers were given relief under the NSW Contracts Review Act.

Senator WILLIAMS: I have more cases. A 98-year old lady was signed up a bank manager to a 30-year loan and was lent $440,000 to invest in a company. The company went broke and she did the lot. Another bloke died at the age of 95 and four years previous he had been signed up to a 30-year, $800,000 low-doc loan. Another bloke who was 88 was signed up to a low-doc loan and invested in a company that was being promoted by one bank manager. Going around to people up to the age of 98 to sign them up for loans, would you call that unconscionable?

Mr Saadat: Potentially it could be unconscionable given

Senator WILLIAMS: I would call it bloody disgraceful.

Mr Kell: We do not have the circumstances of those particular cases in front of us

Senator WILLIAMS: You are going to get them.

 Mr Kell: That is what I was about to ask. Would you be happy to provide them?


Senator WILLIAMS: Happily, and I will take the bank through it on Friday.

 Mr Kell: That will put us in a much better position to respond rather than having things thrown at us.

 Senator CAMERON: Can it be tabled?

 Mr Kell: I can table the very brief upfront part that I am reading from.

 Senator WILLIAMS: I will add to Senator Cameron's point here. According to the previous witness, you are shooting the wrong horse. She said it was not the brokers but the business development managers (Bank BDMs" that train the brokers on the whole process to go through. But ASIC, you are saying, is looking at the brokers, their standards and how they operate. According to the previous witness, it is not the brokers who set down the criteria and what they work under, it is the business development manager from the bank that trains them all. I have letters here from a particular bank to those people. Why do you not focus on them instead of the brokers?

  Mr Kell: I think it is safe to say ASIC focuses on both. Given ASIC's analysis of the market over many years, it does need to focus on the brokers because it has seen misconduct there over time. But it also looks at the practices lenders are pursuing as well. Again, if material is brought to ASIC that indicates there are problems, it acts on it. I would dispute the notion that ASIC is only looking at the brokers and ignoring the lenders. That is not ASIC's approach at all


 Senator CAMERON: You are not indicating to me that you would comment on a specific matter; you just want time to have a look at the question that is raised.

 Mr Kell: I would have to understand whether it is a matter ASIC has looked at, whether it is still looking at it or whether it might face confidentiality constraints. I am not able to provide that sort of information at the moment.

 Senator CAMERON: What I am interested in—and there might be other views on this—is you said if matters are raised with ASIC then ASIC would deal with them. That is contrary to the evidence we had in this particular matter. If you could, have a look at the Hansard on that matter from the previous witness and come back to us, firstly, with what steps ASIC took in the matter and, secondly, what steps as an institution ASIC has put in place to deal with any forthcoming issues of that type. Is that clear?

Mr Kell: I am very happy to do that. I think that would allow a more considered response to those issues 

Mr Kell: Not in any significant numbers. ASIC does hear these types of allegations occasionally raised in public. It needs further information to pursue action than those sorts of general descriptions you have just provided. If ASIC is to take an action it needs specific evidence and that is not always forthcoming. No, ASIC does not have widespread evidence presented to it of some kind of systemic criminality of that sort, if that is how you characterise it, in the Australian banking system.

 Senator CAMERON: No, I do not think I said systemic.

 Mr Kell: In some ways I think that is what you are suggesting. Is ASIC getting a lot of complaints about that across different banks, across different areas of that sort of systemic behaviour? The answer to that is no.

 Senator CAMERON: Whether it is systemic or not, the behaviour is not behaviour that ASIC would tolerate in one incident if it was correct, would it? What role would ASIC play in these types of allegations?

Mr Kell: It is difficult to comment without further information 


Senator WILLIAMS: Section 420A of the Corporation Act—selling assets at around market value. When a receiver is sent by a bank in to a private home, a block of land with a house on it, it is not a company. Does the receiver still have to abide by the Corporations Act and section 420A?

  Mr Kell: I should double-check on that but my understanding is that they do.

 CHAIR: Would you like to know more if that was put to you? Would that raise your interest to say, 'ASIC wants to know more about this'?

 Mr Kell: Again, we are very much prepared to hear about these matters. In relation to some of these cases, it is clear even from the amounts of money that you are talking about that some of them would not fall under the consumer credit protection laws, because they are in the business space, so we would not have the powers under that legislation to look at it. I am very much prepared to consider any evidence you might put to us.


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  • doyla66
    doyla66 Saturday, 29 March 2014

    How did Peter Kell get this job? Given his position he does not appear to be very experienced. How much are the taxpayers being charged for ASIC? We want our money back!

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