The big four banks will face another Parliamentary inquiry in the immediate aftermath of the banking royal commission, as victims groups criticise royal commissioner Kenneth Hayne and the Morrison government for failing to provide meaningful redress for thousands of customers.
Labor passed the terms of reference for the Senate inquiry on Tuesday after securing the support of the crossbench. It will examine whether financial service providers have used the legal system to pressure customers into accepting settlements and whether the bank-funded Australian Financial Complaints Authority is doing its job.
Farmers and small business owners have been left disappointed by the royal comission's 76 recommendations, which focused heavily on structural issues, but offered few salves to those who have had millions tied up in disputes over decades.
"If the bank attacked me today I would have no more rights than what I had before the Hayne royal commission," said Tony Di Donato, who has been battling Comminsure for more than 10 years over a case involving his graphic design business.
Queensland cane farmer Craig Caulfield said the public was still unaware of "the depth of the destruction".
"We hear about fees for no service, but the impact on those individuals aren't that great," he said. "When you talk about us, you are talking about millions of dollars."
Selwyn Krepp, who has been tied up in legal battles with ANZ and the Commonwealth Bank since 2013 over foreclosures on his resort businesses, said the message of the final report was set by Justice Hayne's closing address to the commission in November.
‘Bank Warriors’ (from left) Craig Caulfield , Selwyn Krepp and Michael Sanderson at Parliament House.CREDIT:DOMINIC LORRIMER
"He acknowledged everyone except the victims," he said. "We were sitting there waiting for it. He thanked the stenographer, the solicitors and the media but no victims. That was a kick in the guts and set the tone of what the report was going to be."
The trio, along with farmer Michael Sanderson, have spent the week in Canberra lobbying politicians to do more. On Wednesday, they wore bow-ties in honour of Commonwealth Bank whistleblower Jeff Morris to the farewell speech of one of the royal commission's driving forces, Nationals senator John "Wacka" Williams.
Sitting near them was Commonwealth Bank chief executive Matt Comyn. Only months earlier, Mr Caulfield had bought shares in CBA so he could question Mr Comyn at the annual general meeting, eventually forcing the CEO to meet with him and other victims before the commission released its final report.
"I'm not saying wealth packaging, insurance and other things are not important," said Mr Caulfield. "The royal commission unearthed a lot, but for small-medium business and farmers, it didn't hit the mark, not when you have got more than 10,000 submissions," he said.
Labor's financial services spokeswoman Clare O'Neill said the government needed to consider ways to level the playing field between small operators and the banks.
"Banks have been abusing the legal system to bully customers for too long," she said. “Anyone who’s had a dispute with a bank knows that it's not a fair fight."
The inquiry is likely to see bank chiefs hauled to Canberra twice in as many months following their scheduled questioning from the House of Representatives committee in March. The Senate inquiry's report is due on April 8.
The government has committed to two of the royal commission's recommendations: establishing a national farm debt mediation program and a $30 million compensation scheme of last-resort, but this will only apply to victims whose financial service providers have gone bust.
Labor is also likely to get an amendment through the Senate that will see small business able to take on big business over anti-competitive behaviour.
Clare O'Neil on Thursday.CREDIT:ALEX ELLINGHAUSEN
The amendment will prevent big businesses from winning legal costs from small businesses. It means the government is now likely to face another tight vote on the floor of the House on Monday, when the opposition could pass the law with support of the crossbench.
Despite the setbacks, the government will pass its trademark super package on Thursday after more than a year of negotiations with Labor.
The changes will see superannuation trustees hit with civil penalties for failing to act in the best interests of members and millions of inactive super accounts swept up and re-united with their owners by the Australian Tax Office.
The Australian Banking Association has been contacted for comment.This article was first published by https://www.smh.com.au
Author: Eryk Bagshaw