Bad home loans first on royal commission agenda


Most public complaints deal with misconduct.


  • Home loans, car loans and credit cards top the agenda
  • Role of non-disclosure agreements addressed
  • Vast majority of public submissions deal with misconduct

Commissioner Kenneth Hayne opened The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry on Monday 12 February, laying out the $75 million inquiry's priorities over the next 12 months.

The commissioner acted judicially as he admonished some of the big banks for missing submission deadlines, dismissed the enforcing of gag orders and shared findings uncovered by the commission during its early work.

The first round of hearings – scheduled to take place in approximately one month – will focus on the credit issues that have so far yielded some of the highest number of complaints, namely home loans, car loans and credit cards.

The commissioner called into question the scope of misconduct after some of the big banks failed to meet revised submission deadlines, resulting in them being filed late or incomplete.

"That a request for details of events of misconduct as defined in the terms of reference identified during the last five years cannot be met within the time sought, even though the initial request for that information was made approximately two months ago, is itself a matter to which further attention may have to be given," says commissioner Hayne.

He acknowledged the importance of submissions made by individual members of the public, while also making an appeal for more people to use the recently introduced online tool on the commission's website.

Think the banks need to treat you better? Tell CHOICE what the Royal Commission should focus on.

Of the 385 public submissions filed in the three weeks since it went live, approximately 84% of the individual submissions relate to misconduct or behaviour that falls short of community standards.

There were concerns the worst of the behaviour would go unspoken due to the widespread use of confidentiality agreements. The commissioner quickly addressed this, saying a "notice or summons would not amount to a breach of confidentiality or non-disparagement clause", before adding the commission would be drawn to investigate any information a financial body tried to suppress.

Senior counsel assisting the commissioner, Rowena Orr, QC, then addressed the subject of next month's hearing: home loans, car loans and credit cards.

"The commission will hear evidence...in the context of home lending that suggest that consumers have not always enjoyed the right to be treated honestly and fairly when it comes to home loans," she said.

"Some of these events may have involved breaches of the law, while others may have involved departures from community standards and expectations."

She expressed similar sentiments on the subjects of car loans and credit cards, noting inappropriate or unsuitable lending as an early and emerging theme.

The commission will build upon the 73 recent inquiries and reports from parliamentary committees, regulators, independent reviewers and expert panels that are of relevance to its investigation. A date has yet to be announced for the upcoming hearings that are expected next month.

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