ME Bank adjusts policy following redraw fiasco

by Madison Utley08 May 2020

Following both media and industry fervour, ME Bank has announced it will change back its home loan redraw limits for any customers who want it.

ME recently made changes to some older, legacy home loan products – those originated more than five years ago – which resulted in around 4% of customers having their redraw limit reduced.

The move garnered widespread criticism, from mainstream media, brokers and customers alike. 

In response, the bank blasted the “inaccurate media reporting” which made it sound that money had been removed from customer accounts, rather than an adjustment made to the amount available for redraw. ME stood by its decision to adjust redraw limits, but did concede it should have taken efforts to explain its actions earlier and more thoroughly.

ME acknowledged the decision was “poorly communicated” and caused “significant concern” to its customers. 

“Some of our customers have told us they want their redraw limits changed back to what they were before.  We are going to do that,” said ME Bank CEO Jamie McPhee.  

“We are deeply sorry; we were trying to do the right thing, but we went about it the wrong way.”

The bank has set up a dedicated hotline for any customer who would like their redraw limits changed back or, if they prefer, they can request it online.

“I would like to reassure customers that at no point did the bank ‘remove funds from customer accounts’ or ‘transfer’ any customer funds. Nor was the adjustment made for liquidity reasons,” said McPhee.

“Our priority now is to help, support and service our customers. We recognise that we need to do better, we can and we will.”