Banks divulge misconduct to royal commission

One major bank CEO called his company's submission "confronting"

Banks divulge misconduct to royal commission



Major banks have made their submissions to the royal commission which are expected to disclose previously unreported cases of misconduct in their businesses over the last decade. 

CBA, NAB, ANZ, and Westpac had until yesterday (29 January) to respond to Commissioner Kenneth Hayne as the commission prepares for its initial public hearing on 12 February.

CBA and ANZ confirmed to Australian Broker that they would be lodging their responses to the commission as per the deadline, while NAB issued a statement saying it was doing the same.

In a letter sent last December, Hayne asked the major banks to identify and report not only misconduct, but also conduct the banks considered as having failed to meet community standards and expectations since January 2008. The banks also had to explain why they think those cases of misconduct happened and what they have done to fix them and stop them from happening again.

With this, banks were expected to detail a broad extent of misconduct and cases that could be regarded as not having met community standards.

The Australian Financial Review reported last Sunday (28 January) that CBA would acknowledge failures in its mortgage broking, insurance, and financial planning units in its response, which is expected to give fresh details of misconduct at the bank and its business units.

In a note to staff that Australian Broker obtained, ANZ chief executive Shayne Elliott said he hoped the commission serves as "a watershed moment" in restoring customers' and the community's trust in the banking industry. "I’m committed to ANZ playing a significant role in repairing these relationships."

He called seeing all the issues ANZ has identified for its royal commission submission in one document as "confronting".
"Of course, it would be easy to lay the blame on a few bad apples or to say that these are largely historical technical glitches resulting from large complex IT systems. That would be wrong," he said.

NAB chief legal and commercial counsel Sharon Cook said NAB is committed to cooperating with the commission and that it will respect the processes the commissioner puts in place.

“It is important to NAB, our customers and the community that we learn from the past and work together to build a better banking industry. That’s why we support customer voices being heard by the Royal Commission,” she said.

Meanwhile, submission of evidence by members of the public remains open. One of the first public submissions, by consumer group Consumer Action Law Centre, has targeted “irresponsible” mortgage lending, citing its severe consequences to borrowers. 

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