Borrow
Consumers let down by government failures on the banking RC
In the two years since the financial services royal commission, super fund members, bank customers and insurance policyholders have all been let down by the federal government’s failure to implement its findings, a legal group has stated.
Consumers let down by government failures on the banking RC
In the two years since the financial services royal commission, super fund members, bank customers and insurance policyholders have all been let down by the federal government’s failure to implement its findings, a legal group has stated.
The banking royal commission chaired by Kenneth Hayne gave 76 recommendations to the government, with less than half of them being implemented, while four have been completely abandoned in the two years since it was founded.
At the time, the Morrison government created an implementation roadmap setting out how the government will deliver on its comprehensive response to the royal commission, which it said would “restore trust in Australia’s financial system”.
“In the government’s response, released in February this year, we committed to taking action on all 76 royal commission recommendations and, in a number of key areas, going further,” Josh Frydenberg said while presenting his roadmap.
However, the Australian Lawyers Alliance (ALA) said that despite promising reform, the government is yet to deliver.
“A majority of the reforms have been delayed and, unbelievably, some have been abandoned completely,” ALA spokesperson Josh Mennen said.
While the government has highlighted the challenges of the COVID-19 pandemic and the economic impacts that have forced them to delay implementation, the ALA said consumer protection is needed now more than ever.
“That doesn’t pass the ‘pub test’ given consumer protections are needed more, not less, during times of financial uncertainty and turmoil,” Mr Mennen said.
“For example, the long-promised ‘compensation scheme of last resort’ has not yet been introduced.”
“The scheme will help consumers who have proven they were given negligent financial advice only to find the advice firm has gone bust and can’t pay up.
“This compensation would have been invaluable for those struggling during the high unemployment and economic turmoil wrought by the pandemic,” Mr Mennen said.
With February 1 marking the royal commission’s second year anniversary, law firm Maurice Blackburn also pointed out the importance of consumer protection during this period.
Maurice Blackburn’s principal, Kim Shaw, highlighted that the federal government has used COVID-19 as the reason for delay on a number of recommendations, but the fact remains that many of these recommendations are now more important than ever in ensuring consumers are properly compensated for harm caused and protected from poor behaviour.
“It abandoned key recommendations from commissioner Hayne to protect consumers against unfair or irresponsible lending and to ban commissions for mortgage brokers – both of which were crucial measures that have become even more important in the wake of COVID-19,” she said.
“As the royal commission demonstrated, banks’ relaxed lending standards and brokers’ involvement in loan sales resulted in widespread debt overcommitment, and our firm has represented hundreds of consumers who have fallen victim to these issues through irresponsible lending.
“Yet, rather than act on the recommendations from commissioner Hayne to address these issues, the federal government continues to try and make it easier for banks to lend money and provide credit without further necessary protections – measures that risk causing considerable problems for consumers when they can least afford it,” Ms Shaw concluded.
About the author
About the author
Banking
ANZ sued for allegedly misleading customers
The corporate regulator has commenced civil proceedings in Federal Court. ...Read more
Banking
Banks report $14.4bn profit amid pressure on net interest margins
Australia’s major banks have reported a significant boost to their bottom lines and returns in the first half of the 2022 financial year, signaling sector-wide resilience despite persistent pressure...Read more
Banking
Major banks report rising profits
NAB and ANZ announced their half-year results this week. ...Read more
Banking
Modernisation of direct debit system suffers setback
According to the Reserve Bank (RBA), several major banks will not be able to meet the current timeline for the launch of the PayTo service. ...Read more
Banking
Australians' trust in digital providers has decreased in last five years
Australians have little trust in organisations keeping their information secure, but the financial services industry still sits atop the list. ...Read more
Banking
Commonwealth Bank chairman to retire in August
The Commonwealth Bank (CBA) board has announced a successor. ...Read more
Banking
Westpac responds to $113m penalty
The big four bank has responded to the penalty handed down last week. ...Read more
Banking
Westpac ordered to pay $113m for ‘widespread compliance failures’
Westpac has been ordered to pay penalties in the amount of $113 million for widespread compliance failures across multiple businesses, including Westpac’s banking, superannuation, wealth management ...Read more
Wrapping up an eventful 2021
Listen now
What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now
Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now
Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now
Banking
ANZ sued for allegedly misleading customers
The corporate regulator has commenced civil proceedings in Federal Court. ...Read more
Banking
Banks report $14.4bn profit amid pressure on net interest margins
Australia’s major banks have reported a significant boost to their bottom lines and returns in the first half of the 2022 financial year, signaling sector-wide resilience despite persistent pressure...Read more
Banking
Major banks report rising profits
NAB and ANZ announced their half-year results this week. ...Read more
Banking
Modernisation of direct debit system suffers setback
According to the Reserve Bank (RBA), several major banks will not be able to meet the current timeline for the launch of the PayTo service. ...Read more
Banking
Australians' trust in digital providers has decreased in last five years
Australians have little trust in organisations keeping their information secure, but the financial services industry still sits atop the list. ...Read more
Banking
Commonwealth Bank chairman to retire in August
The Commonwealth Bank (CBA) board has announced a successor. ...Read more
Banking
Westpac responds to $113m penalty
The big four bank has responded to the penalty handed down last week. ...Read more
Banking
Westpac ordered to pay $113m for ‘widespread compliance failures’
Westpac has been ordered to pay penalties in the amount of $113 million for widespread compliance failures across multiple businesses, including Westpac’s banking, superannuation, wealth management ...Read more
