One of the mortgage broking industy’s peak bodies has thrown its support behind Labor’s calls for a royal commission into the banking sector.
The Finance Brokers Association of Australia (FBAA) yesterday revealed that it wants banks to start “practicing what they preach”.
The FBAA’s Peter White says it isn’t enough for the banks to explain their actions only once a year, and dismissed a move by leading executives who have taken an oath to lift ethical standards in the industry.
“How ironic for bankers to sign an oath promising to lift values and ethics when the spotlight is now on them for filling their pockets and failing to pass on the full interest rate cuts,” Mr White said.
The Banking and Finance Oath has now been signed by more than a thousand bankers nationwide including the heads of ANZ and National Australia Bank.
“If they want to show they are ethical and hold values then actions must speak louder than words,” Mr White said. The FBAA boss recently challenged the major banks and lenders to pass on the full interest rate cuts to consumers.
“CEOs and senior managers are pocketing enormous bonus payments for reaching billion-dollar profit targets but where is the reduction in credit card rates which are at an all-time high?”
The industry veteran claims the banking fraternity is deluded if they feel this type of public relations stunt will keep their customers satisfied.
“A need for an oath to uphold better values simply tells me and the community that banks are admitting they haven’t acted ethically in the past.”
“Let’s put this bill to Parliament and bring on a royal commission as this behaviour is offensive to borrowers and depositors across Australia.”
Opposition leader Bill Shorten called for a Royal Commission into the banks early in April. Along with negative gearing, it became one of the most hotly debated themes of the federal election.
While the coalition ultimately secured its place in government on 2 June, Labor has not backed down on its bashing of the big banks. The RBA rate cut this month created a fresh round of ammunition for the opposition when the majors failed to pass on the 25 basis point reduction to mortgage customers.
In a doorstop interview in Melbourne last week, Mr Shorten reaffirmed his position: “We're not going to give up on a banking Royal Commission, we're not going to give up our opposition to a $50 billion tax cut for large multinationals,” he said. “Mr Turnbull's policies are out of touch.”
The Australian Bankers’ Association (ABA) has previously stated that a royal commission is “unnecessary and a “waste of tax payer funds”.
The ABA has since hired corporate law firm Gilbert+Tobin to review the industry's remuneration practices and announced six measures aimed at "strengthening community trust" in banks.
[Related: FBAA slams major bank for 'dodgy' practices]
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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