BFCSA Blog

Tracker scandal could open door to laws allowing for class actions Borrowers 'treated disgracefully' – Donohoe Kevin Doyle and Cormac McQuinn October 25 2017 2:30 AM https://www.independent.ie/irish-news/politics/tracker-scandal-could-open-door-to-laws-allowing-for-class-actions-36259491.html New laws to allow for 'class actions' are under consideration on the back of the tracker mortgage scandal. Fianna Fáil is examining what it has described as a "sea change" for the legal system. It comes ahead of a much-hyped statement from Finance Minister Paschal Donohoe in the Dáil tonight. Mr Donohoe yesterday said the Government was "not satisfied with the progress lenders have made to date". Speaking after his meetings with Bank of Ireland, KBC, Ulster Bank, AIB and Permanent TSB, the minister said he believed tracker mortgage borrowers had been "treated disgracefully". "We should be clear that it was the mortgage lenders that caused this harm to their customers and that the primary responsibility for rectifying the problem rests with them. "Therefore,...

The lone ranger........   Westpac to fight rate-rigging case alone, ANZ and NAB settle   By business reporter David Chau Updated 8 minutes agoMon 30 Oct 2017, 1:27pm http://www.abc.net.au/news/2017-10-30/westpac-to-fight-bbsw-rate-rigging-case-in-court-nab-anz-settle/9083848     Related Story: ANZ and NAB settlement talks delay trial, Westpac 'ready to go' Related Story: ANZ settles interest rate rigging case just before trial begins.   Westpac will be the only bank to fight rate-rigging allegations brought by the corporate watchdog ASIC in court. Lawyers for Westpac, ANZ, and NAB fronted the Federal Court this morning to discuss the next steps in the case. Westpac continues to maintain it did not manipulate the bank bill swap rate (BBSW) for economic gain, and will defend its case tomorrow before Justice Jonathan Beach. NAB and ANZ have settled their cases with ASIC, and will return to court on November 10 to obtain judicial approval for their settlement. More to come....

Chinese money seeps through the cracks into the world – and Australia’s – housing markets   Bloomberg NewsSep 29, 2017 https://www.domain.com.au/news/chinese-money-seeps-through-the-cracks-into-the-world--and-australias--housing-markets-20170929-gyr3wf/?utm_source=facebook&utm_medium=cpc&utm_content=link-newsfeed&utm_campaign=c-all-autopromo-prospecting Shanghai restaurateur David Hu said he’s nervous about wiring money to Australia for a home purchase because of China’s crackdown on currency outflows. Instead, he plans to carry the cash in a suitcase.  The 61-year-old intended to move about $85,000 to Melbourne this month, the last part of his financing for a deal struck last year.  “Buying a property abroad was and is still workable,” said Hu, though he described the process as a “lot more troublesome” nowadays. Tighter capital controls have done little to dent the appetite of Chinese buyers who already helped drive prices higher across the globe. While definitive data are hard to come by, real estate brokers including Knight Frank LLP, Savills Plc and domestic firm Shiju report rising purchases of overseas property this year. What’s...

Investors say they are victims of alleged $120 million Pilbara Ponzi scheme 7.30 By Claire Moodie 30 October 2017 Posted 25 minutes agoMon 30 Oct 2017, 3:43pm http://www.abc.net.au/news/2017-10-30/investors-shattered-by-$120-million-alleged-pilbara-ponzi-scheme/9055224 Mum-and-dad investors caught up in an alleged Ponzi scheme in Western Australia say they are "absolutely crushed" and "broken" by the experience. Key points: Thousands of people invested $120 million in the Newman Estate project run by Macro Allegations that investor signatures were forged on a key document Macro's Veronica MacPherson says government decisions negatively affected the project She denies any signatures were forged As an ASIC investigation continues into collapsed property developments of Perth businesswoman Veronica MacPherson, investors are anxious for clarity on whether they will ever see their money again. Liquidators estimated about 2,000 private investors from Australia, Europe and Asia chipped in about $120 million to the projects run by Ms MacPherson and the Macro Group of companies. Perth retiree...

Amazing what bank stories rarely get reported in the mainstream media..... CBA and ANZ!   Australian investors gain significant win against Standard & Poor’s By Amanda Banton on October 25, 2017 Posted in Australia,Cross Border https://www.esquireglobalcrossings.com/2017/10/australian-investors-gain-significant-win-against-standard-poors/   Investors in Australia, represented by Squire Patton Boggs in Sydney, have made history again with another big win over Standard & Poor’s (S&P). They were granted leave to pursue a “tort of deceit” claim, alleging that S&P intentionally altered its ratings methodology to achieve higher ratings in order to serve its business objectives.   This is the first time that very technical and detailed allegations of fraud in S&P’s rating methodology have been pleaded worldwide. As a result of adding the tort of deceit claim, the investors claim that the limitations period is paused from when they first suffered loss, until they could have reasonably discovered the deceit/fraud. This is very significant for these...

With such lack of understanding and lack of  accountability, the BEAR legislation is doomed and should be put out of its misery.   For bankers, acountability does not start at home October 27, 2017 10.56am AEDT Pat Mcconnell   http://theconversation.com/for-bankers-acountability-does-not-start-at-home-86312?utm_source=facebook&utm_medium=facebookbutton   When the CEOs of the four major banks fronted the House Economics Committee, the common thread was that accountability does not lie with them. Even after a decade of scandals like interest rate rigging, gouging of interest-only mortgagees and alleged money laundering. In August, AUSTRAC filed a claim against the Commonwealth Bank for some 52,000 infringements of money laundering laws, and ASIC finally got to hear about it. The true hierarchy of power and the realities of regulators’ supposed independence were laid bare by Commonwealth Bank Chairwoman Catherine Livingstone when relating the sequence of events: We were having board meetings at the time I was being called to Canberra by the...

All hail British banks: self-absorbed, short-termist and spivvy Phillip Inman  29 October 2017  The banks are obsessed with lending to property owners and developers, at the expense of other businesses – and the government gives them its full backing   https://www.theguardian.com/business/2017/oct/28/british-banks-short-termist-self-absorbed?CMP=Share_AndroidApp_Tweet  When everyone around you sits on their hands, it’s tempting to take control. While companies refuse to invest and Whitehall is paralysed by Brexit, why not legislate and nationalise to get something done? Britain is in the midst of an investment crisis, a productivity crisis, an income crisis and an inequality crisis – and all are so entrenched that they are beyond policies that tinker or No 10’s “nudge unit”. Nudge economics, despite the award this year of a Nobel prize to its main proponent, the American Richard Thaler, is a pathetically weak tool given the scale of the problem. What’s more, so many of the government’s current policies, nudge...

Housing volumes could plummet and prices tank, Citi says ABC News27 October 2017 3:44pm Stephen Letts   House price declines of up to 20 per cent and an 80 per cent crash in residential sales is the doomsday scenario investment bank Citi says is a real possibility if the residential property market rolls over. Citi's residential property team has looked at the impact of a cooling property market on big developers such as Stockland and Mirvac and the picture is far from pretty. "When the market cools, it freezes — peak to trough volumes can decline as high as up to -80 per cent," Citi's David Lloyd said. "One industry contact puts a 90 per cent probability on a 10-to-20 per cent decline in house prices in the next 12 to 24 months," Mr Lloyd and his team wrote in a note to investors. "House prices tend to closely follow housing...

No upper limit to compensation?  The threat of criminal action is the only thing that sees banks open their wallets...     Irish banks caught in mortgage scam which cost people their homes Paddy Clancy @IrishCentral October 27, 2017 02:33 AM   https://www.irishcentral.com/news/politics/irish-banks-caught-in-mortgage-scam-which-cost-people-their-homes#.WfLuLzAA6ak.twitter   Finance Minister Paschal Donohoe has been admonishing the heads of 11 banks and financial institutions over a rip-off mortgage scam which wrested extra income from thousands of customers and even cost some their homes in repossessions. In a series of meetings over three days, concluding on Wednesday of this week, the minister has been urged to threaten the banks with heavy fines and to fast-track legislation to impose the penalties. Up to 30,000 customers have lost hundreds of millions of euros in what has been dubbed the tracker mortgage scandal. Effectively what happened is banks are accused of wrongly raising extra interest when they forced customers off loss-making...

This was not reported in the mainstream media of course any more than CBA reported the identity theft    Farmer denies CBA claim that he stole his own identity Posted by Michael West | Oct 21, 2017 https://www.michaelwest.com.au/go-to-fos-cba-tells-victim-of-identity-theft/ Three years after his identity had been stolen and his private banking documents found on the side of the road, Barry Lakeman has been advised by Commonwealth Bank that a review is under way. Originally, the bank suggested to Lakeman that he and his wife were to blame, that they dumped their own documents on the side of the road in Victoria. This week, the bank advised Lakeman to seek redress via the Financial Ombudsman’s Service (FOS), a private complaints service funded by the banks according to how many complaints they incur. In keeping with CBA’s attempts to cover up the scandal over its 54,000 money-laundering breaches, and not report crime to the...

Famous last words ... The legislation should also broaden its definition of misconduct to include conduct that affects consumers and investors, Mr Medcraft said.   ASIC tells Treasurer to widen bank pay laws 26 October 2017 http://www.smh.com.au/business/banking-and-finance/asic-tells-treasurer-to-widen-bank-pay-laws-20171026-gz8pll.html?utm_source=twitter&utm_medium=social&utm_campaign=nc&eid=socialn%3Atwi-13omn1677-edtrl-other%3Annn-17%2F02%2F2014-edtrs_socialshare-all-nnn-nnn-vars-o%26sa%3DD%26usg%3DALhdy28zsr6qiq New laws designed to hold individual banking executives accountable for scandals within their organisation could soon be extended to the wider financial services industry and address misconduct as well as systemic issues, a Senate hearing has heard. Australian Securities and Investments Commission outgoing chairman Greg Medcraft said at Senate estimates on Thursday he had told Treasurer Scott Morrison to broaden the regime. Corporate regulator Greg Medcraft made the comments at his last Senate Estimate hearing as head of the Australian Securities and Investments Commission.  "I've said to the Treasurer, it (the regime) probably needs to start with banks and then probably move into insurance companies," Mr Medcraft said. "And then it should extend as...

Mastering the art of lying these days must be a prerequisite for rising through the ranks with the Libs....   AFP raid: Time to Cash out before she moves into a bigger role Jenna Price   28 October 2017 http://www.smh.com.au/comment/afp-raid-time-to-cash-out-before-she-moves-into-a-bigger-role-20171026-gz9b0t.html The first time Michaelia Cash ever lied to me was in 2015. I actually took it pretty personally. She looked me straight in the face and lied to me as we stood in the same room. Cash is what Australians call a hard arse. Someone who toughs it out right until the end, no matter what the circumstance. In some ways, it's admirable. That brutal determination to crush your opponents underfoot – and win – is a skill the Australian Labor Party could do with acquiring. Of course, we don't yet have all the facts of who knew what when about the Registered Organisation Commission, the Australian Federal Police raid on...

Big banks face $100m blow as ANZ confesses The Australian 12:00am October 24, 2017 Ben Butler   Australia’s big banks are nearing a deal that could trigger more than $100 million in penalties — the nation’s biggest corporate payout — after ANZ yesterday admitted wrongdoing to settle landmark legal action over the rigging of interest rates to inflate profits. In addition to its confession, ANZ has agreed to pay between $50m and $60m to settle the ­Federal Court case, eclipsing the record civil penalty of $45m Tabcorp set in March over breaches of anti-money laundering laws. The Australian Securities & Investments Commission’s ability to reap the biggest possible payday depends on it settling on similar terms to the ANZ with the two other banks, NAB and Westpac, it is also fighting in Federal Court over rate rigging. Although the NAB was close to settling last night, Westpac was less keen on...

Banks are behind these grubby pressures to AVOID have a ROYAL COMMISSION into BANKS and REGS The Cover-Up is like The Emperor has no clothes.  We all remember the $80 million of tax payer dollars wasted on the RC into Unions.  We need a Royal Commission into the Banking system, then Turnbull can retire in style to the Cayman Islands and pretend the HIH debacle the Banking Scandal never happened. Michaelia Cash lied and needs to face instant dismissal.    The Bankers have plenty of Questions that need to be answered.   Australian Workers Union raid: Bill Shorten says it is a 'grubby effort' by Malcolm Turnbull ABC News25 October 2017 Louise Yaxley   Raiding the Australian Workers Union (AWU) offices is part of a "grubby effort by a grubby Prime Minister" to smear the Government's political opponents, defiant Labor leader Bill Shorten says. Federal police raided AWU offices yesterday as...

Sums up perfectly....Turnbulls, since HIH debacle,  has been a disaster in everything they have touched   The Turnbulls couldn’t run a piss-up in a brewery By Houses and Holes in Australian Politics, Featured Article at 12:30 am on October 25, 2017 | 49 comments https://www.macrobusiness.com.au/2017/10/the-turnbulls-couldnt-run-a-piss-up-in-a-brewery/ It’ s been a long and sad road for the MB narrative. We’ve watched on as consecutive governments have failed to grasp Australia’s contemporary political economy challenges, rendering bad decision after bad policy after stupid idea to snow the economy into a corner from which it will now be near impossible to rescue it. The answers all along weren’t hard. We needed to recognise that the post-GFC mining boom was short term and manage it accordingly. When it finished we needed to manage a real exchange rate adjustment to improve competitiveness and reboot non-mining tradables. And all along we needed to do some productivity reform to keep...

Corporate penalties for wrongdoing to be tripled Australian Financial Review Oct 22 2017 11:00 PM Patrick Durkin   EXCLUSIVE  The Turnbull government is preparing to triple corporate penalties for wrongdoing and force offending companies to forfeit profits from wrongdoing, to give incoming chairman of the Australian Securities and Investments Commission James Shipton a big stick to re-energise the watchdog. Minister for Financial Service Kelly O'Dwyer will release a review by the ASIC Enforcement Review Taskforce as early as Monday on "strengthening penalties for corporate and financial sector misconduct", which follows recommendations by David Murray's Financial System Inquiry to "substantially increase" civil and criminal penalties. The government established the ASIC taskforce - led by senior members of Treasury, ASIC, the Attorney-General's Department and the Commonwealth Director of Public Prosecutions - last year as part of its move to dampen Labor's calls for a royal commission into the banks. It followed warnings by...

Greg Medcraft, the corporate regulator, goes on trial Australian Financial Review Oct 22 2017 11:00 PM Aaron Patrick and Patrick Durkin   The ANZ Banking Group, National Australia bank and Westpac Banking Corp will be in the dock on Monday, but it is Greg Medcraft and the Australian Securities and Investments Commission's reputation that is on trial. Medcraft's prosecution of the banks for allegedly fixing the benchmark interest rate – the trial begins in a Melbourne Federal Court Monday – is a pivotal moment in the regulator's history and could have a decisive impact on its future. If ASIC loses the case, which could cost more than $100 million, new chairman James Shipton will be under even more pressure to change what ASIC does and how it does it from a government unhappy with its performance. "ASIC is like a fire engine that turns up after the village has burnt down,"...

150 basis points on lending would trigger a recession: property exec Australian Financial Review Oct 22 2017 11:30 PM Matthew Cranston   Taxes, higher interest rates and rising construction cost pressures caused by competing infrastructure projects pose the biggest risk to Australia's housing market and economic performance say four chief executives who control more than 10 per cent of new housing. Lendlease's chief executive for property Kylie Rampa, Mirvac chief executive Susan Lloyd-Hurwitz, Stockland chief executive Mark Steinert and Frasers chief executive Rod Fehring all raised concerns at the Property Council of Australia Congress about the future of country's housing supply and its importance to the health of the economy. Mr Fehring said the sensitivity of interest rates would have the biggest impact on the housing construction market and therefore the economy. "About six to 12 months ago we formed the view that if interest rates in the broad-based mortgage market...

“If there is a bubble, it is not obvious what to do about it.” We need a Royal Commission into the Banking system, then Turnbull can retire to the Cayman Islands, taking the loot with him, and a PM pension. Bank CEO's and Turnbull & Co will leave this nation a damaged economy!!! Financial Terrorists.....................are a blight on us all.     Is an addiction to property stifling the economy? The Bull23.10.2017   Housing as a wealth generator drains investment from other areas Sydney and Melbourne voters who took part recently in focus group research conducted by Ipsos had a long list of complaints about the cost of living, but it was soaring house prices that attracted the greatest ire. Younger voters feared never being able to buy a home, while older voters held the same fears for their children. It’s not news that Australians are worried about housing affordability. In...

The LNP backbenchers are throwing tantrums again over their mates in the big end of town having interventionist policies applied to their dodgy business practices. Liberal backbenchers are warning they will not tolerate any more direct intervention in the affairs of big business, saying this week's party room unrest over the new accountability regime for banking executives was just the tip of the iceberg. Coalition MPs said the protest registered this week by three Victorian Liberals against the Banking Executive Accountability Regime was not a defence of the banks but a message to Malcolm Turnbull and Scott Morrison of a growing unhappiness with the interventionist approach by the government. While some conceded the direct intervention in the energy sector may yield a political dividend, there was a view the government's measures against banks had flopped politically because they were seen as a response to Labor's calls for a royal commissions. "The political...

Borrowers not saving any money add to fears around interest-only loans The Australian 12:00am October 20, 2017 Michael Roddan  Is the Government so STUPID it does not understand Bank Approval Fraud re Interest Only loans?   Many interest-only borrowers are failing to put aside money, even though their monthly mortgage repayments are about 40 per cent below home loans paying off principal and ­interest. It’s a further concern added to a growing list of worries about the threat interest-only loans present to the financial system. Interest-only loans, which don’t require any payment on the loan’s principal for about five years, have come under intense scrutiny over the past year. The Australian Prudential Regulation Authority introduced strict rules in March limiting interest-only loans to 30 per cent of a bank’s new lending. That came on top of a 10 per cent annual growth cap on investor lending. Interest-only loans make up more...

Shadow banks warn on new APRA powers Australian Financial Review Oct 19 2017 11:00 PM James Frost   New powers granted to APRA over non-bank lenders may lead to a wholesale lessening of competition as niche lenders are forced to scale back their activities and others consider exiting the sector altogether. Liberty Financial, Pepper Group and Resimac warn that if APRA exercises powers under the new legislation and introduces caps on loan growth, or otherwise restricts the types of loans they write, large segments of the population may be unable to access housing finance. The view is confirmed by experts, who say if bank-style regulation is imposed on the non-bank sector they will lose their competitive advantage and will be forced to reinvent themselves in order to remain profitable. Liberty Financial chief executive James Boyle said the introduction of caps similar to those placed on Australian banks may force it to...

Interest-only loans are a huge problem for the Australian economy, but our top bankers don't seem to care Richard Holden 3 days ago http://www.msn.com/en-au/money/homeandproperty/interest-only-loans-are-a-huge-problem-for-the-australian-economy-but-our-top-bankers-dont-seem-to-care/ar-AAtmQ4I I’m not normally a fan of parliament hauling private sector executives before them and asking thorny questions. But when the Australian House of Representatives did so this week with the big banks it was both useful and instructive. And, to be perfectly frank, terrifying. Let’s start with Westpac CEO Brian Hartzer. First, he confirmed the little-known but startling fact that half of his A$400 billion home loan book consists of interest-only mortgages. Yep, half. Of A$400 billion. At one bank. Oh, and ANZ, CBA and NAB are all nearly at 40% interest-only. Hartzer went on to make the banal statement: “we don’t lend to people who can’t pay it back. It doesn’t make sense for us to do so.” So did it make sense for all those...

Peter Dutton vows to fight for citizenship shake-up The Australian 12:00am October 19, 2017 Joe Kelly   Immigration Minister Peter ­Dutton’s overhaul of Australian citizenship laws has suffered a major setback after his changes failed to pass parliament before a Senate-imposed deadline — an outcome hailed yesterday as a “major victory” by Labor and the Greens. The proposed shake-up would have increased the permanent residency requirement for citizenship from one to four years and imposed a tougher English-language requirement on ­aspiring Australians. Mr Dutton yesterday flagged that negotiations would continue with crossbench senators, although no timeline has been set on the passage of any revamped package. “It’s a shame that Bill Shorten is so weak that he has to capitulate to the hard left of the Labor Party against the national interest,” Mr Dutton said. Labor’s citizenship spokesman Tony Burke said the failure of the bill was a “great victory for...

Welfare spending rises as home ownership declines: report Sydney Morning Herald October 19 2017 - 1:19am Andrew Taylor   Australia has one of the lowest rates of home ownership among rich countries as the dream of owning a home fades for young people and the lowly paid. The latest report card into the nation's wellbeing also found welfare spending increased by $40 billion in the past decade, growing to 9.5 per cent of gross domestic product. Rates of home ownership - either with or without a mortgage - declined "modestly" over the past two decades - from 71 per cent in 1994–95 to 67 per cent in 2013–14, according to the Australian Institute of Health and Welfare report Australia's welfare 2017. This put Australia 29th among the 35 countries in the Organisation for Economic Co-operation and Development, behind Hungary, the Czech Republic, Iceland and Ireland. "Home ownership rates have tended to...