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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.


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BFCSA: Scott Morrison admits CBA money laundering a national security risk

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CBA blasted over breaches as $700m fine laid down

The Australian 12:00am June 5, 2018

Michael Roddan, Pamela Williams


Scott Morrison has blasted the Commonwealth Bank for putting national security at risk, after the country’s biggest financial institution was hit with a record $700 million fine for flouting anti-money-laundering and counter-terrorism financing laws.

The largest penalty in Australian corporate history comes amid warnings from the head of the ­financial intelligence regulator, Austrac, of “exponential growth” in offshore crime syndicates targeting Australian banks in an ­attempt to launder funds.

In an exclusive interview, ­Austrac chief executive Nicole Rose told The Australian a large number of criminal gangs were targeting Australia due to the high prices syndicates can charge for drugs. “We think that 70 per cent of our organised or serious crime has links to, or originates, overseas,” Ms Rose said. “This is not Colombian drug cartels; it’s people driving up to our suburban banks and putting in this sort of cash. A lot of it is criminal gangs.”

CBA has been heavily criticised by politicians and regulators for ­allowing drug-smugglers, suspected terrorist financiers and gun dealers to use its so-called smart ATMs for washing money through the finance system.

The nation’s largest bank yesterday struck a settlement with Austrac, admitting to breaching the law 53,750 times.

The fine is almost double the bank’s provision of $375m for a civil penalty, which it outlined in its interim result in February. It is equivalent to 7 per cent of its $9.93bn profit in 2017. The Federal Court could still decide to impose a higher or lower fine.

The Treasurer said the breaches of anti-money-laundering rules could have put national security at risk and the scandal represented “a very egregious episode” in the history of the bank. Mr Morrison warned CBA to think “very carefully” about whether it would ­attempt to pass on the costs of the penalty to customers.

Home Affairs Minister Peter Dutton said the penalty was “a very clear message” to finance companies about the consequences of “working outside the law”. Mr Dutton said CBA’s “disregard” for the law allowed criminals to ­exploit its systems and put the community at risk. “It was unacceptable for any ­financial institution, let alone the Commonwealth Bank, to be in a position where they are failing to meet their obligations,” he said.

“If we don’t have proper oversight of transactions, criminal syndicates take advantage of it, and that’s exactly what happened here.

“CBA had systems that completely failed and a culture developed where these breaches could take place.”

The banking regulator recently forced CBA to put aside $1 billion in regulatory capital after an investigation of the bank’s culture and governance found it guilty of complacency, having a “reactive stance”, being insular and not learning from experiences and mistakes.

The legal action, launched by Austrac in August last year, triggered an overhaul of the bank, including the early resignation of then chief executive Ian Narev, and a board and executive clean-out. The action also paved the political groundwork for the banking royal commission.

The $700m civil penalty, plus Austrac’s legal costs of $2.5m, are lighter than the $1bn-plus fines analysts had expected, and caused shares in the bank to rally by 1.5 per cent.

Ms Rose defended the deal, ­arguing that the maximum ­potential penalty of more than $1 trillion would have been un­enforceable. She said the fine was an “appropriate settlement” that “reflects the extent of the noncompliance” by the bank.

CBA chief executive Matt Comyn, who took charge in April, said the settlement was a clear ­acknowledgment of the bank’s failures. “On behalf of Commonwealth Bank, I apologise to the community for letting them down,” he said.

CBA’s intelligent deposit machines, which were rolled out in 2012, failed to send Austrac thousands of legally required reports of money being washed through the smart ATMs by criminal syndicates and terrorist financiers.

In a statement of agreed facts, CBA admitted that if it had listened to Austrac and limited the access criminal syndicates had to its machines, it could have disrupted gun runners and drug gangs importing and distributing methamphetamine. The bank also failed to notify Austrac of six transactions that were made by five potential terrorist financiers. Despite finding that “several million dollars’” worth of illegal ­activity went undetected due to the bank’s failures, Austrac said it still suspected there was a further ­“significant” amount of money laundering through other accounts.

The statement shows CBA continued to fall short of the law until late April this year, when it finally implemented Austrac’s ­advice to limit the amount of money that could be pushed through its machines. Under questioning in October from MPs on a House of Representatives economics committee, Mr Narev, who resigned when Austrac filed its law suit last August, defended the lack of a daily deposit limit on the machines.

One of the cases named in Austrac’s legal suit involved a NSW Police investigation into a Vietnamese drug and gun-­running gang in Sydney. Another case was linked to a Lebanese-Australian man who ran into trouble with authorities in Lebanon in 2004 and had alleged involvement with al-Qa’ida.

Regal Funds Management banking analyst Omkar Joshi said the penalty was lighter than what the market was expecting but large enough for Austrac to make a statement.

Brian Johnson, banking expert at stockbroker CLSA, said the fine was “manageable” and “far less than implied” by the 13 per cent slump in the bank’s stock price when the legal action was filed.

Despite spending $400m on improving its legal compliance since 2010, CBA was still slapped down for its tardy approach to shoring up its risk systems.

Ms Rose criticised the bank’s plan for a five-year overhaul of its compliance systems as taking “too long” and urged the lender to hasten its remediation program.

Labor assistant Treasury spokesman Andrew Leigh said the size of the fine reflected the gravity of CBA’s wrongdoing. “It reinforces the call we have been making for the last two years for a royal commission,” Dr Leigh said.


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