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.
"No particular statutory provision has been identified. Moreover, the Commission did not hear evidence from any customer affected by conduct that is said to amount to misleading and deceptive conduct," the bank said.
NAB also rejected the finding it had engaged in unconscionable conduct.
NAB's chief customer officer Mike Baird tells the AFR Banking Summit he wants all his bank’s leaders to feel the Hayne commission “personally” while Former Prime Minister Paul Keating says it’s a chance for structural change.
"The nature of the unconscionable conduct has not been identified by Senior Counsel Assisting, nor has there been any identification of law which has been allegedly breached or the conduct that is said to give rise to the proposed finding," NAB said.
NAB's response came after Ms Orr made an open finding to the royal commission that the bank had breached its obligations under the Corporations Act.
The ANZ also rebuffed the preliminary findings by the royal commission that it breached the obligations for financial services licences under the Corporations Act in its handling of home loan customer Robert Regan.
Last month the royal commission heard Mr Regan, a widower who has an acquired brain injury, was made destitute after taking out a home loan with ANZ through a broker after being targeted by an online romance scam.
The royal commission had suggested ANZ had breached its financial services obligations in issuing the loan to Mr Regan.
ANZ said there should be no finding of misconduct made against it.
The bank added: “Even if a misconduct finding were made, the Commission should not conclude that it was attributable to an approach by ANZ in this case, or a culture within the bank generally, which favours administrative convenience over strict adherence to the law.”
ANZ said in relation to its car loans business Esanda, which it sold to Macquarie in 2015, it should not be found to have breached the national consumer credit protection act and its financial services licence because the misconduct was carried out by third parties.
Westpac argued it did not enage in misconduct in relation to unsolicited credit card limit increases, and in granting car finance loans to some customers.
In one case study, it admitted to not properly checking the income of customer Nalini Thiruvangadam, but said there was no basis to find it did not make "reasonable inquiries" into her financial situation.
Commonwealth Bank, which was put under the microscope over the commission structure it had with mortgage brokers and the disclosure of these payments to customers, also said misconduct findings should not be made against the bank.
"CBA submits that the Commission should not make a finding that the mere existence of the commission structure for mortgage brokers amounts to inadequate arrangements to manage conflicts of interest," CBA's submission said.This article was first published by: https://www.smh.com.au
Author: Clancy Yeates & Sarah Danckert