Royal commission urged for banking industry

Australian banks are believed to have followed the same path of the global banking giants leading to the Global Financial Crisis (GFC) of 2008. In order to avoid borrowers from losing their homes, the Banking and Finance Consumer's Support Association (BFCSA) urges a Royal Commission to be put in place.

"Our members have uncovered fraud, forgery and other criminal behaviour by bankers here in Australia.  

"BFCSA have found and reported the manipulation of valuations (in every case), Loan to Valuation ratios hyped up to 140% creating toxic lending activity by 17 members of an easily identifiable banking cartel. 

"Bankers deliberately approved large quantities of unverified, unaffordable mortgage loans to low income families and pensioners. Bankers ignored any known risks and failed to observe the fact that despite owning a home and debt free, the intended victim will lose everything. 

"Our nation’s elite of the banking sector suggest to regulators and parliament: 'most loans settle within 5 years'. These are 'intended 30 year interest-only loans. Customers believe they have 30 years where this system of buffer loans will work according to banker advice and strategies. The loans do not amicably 'settle'."

"People coming to BFCSA for help is proof enough of what is really taking place. Widespread bank bullying is an issue for another Inquiry." Denise Brailey, a criminologist specialising in white collar crime, wrote in the submission to the House of Representatives Standing Committee on Economics Inquiry into Home Ownership, on behalf of BFCSA.

"The Banking and Finance Consumer Support Association is in fact the only known consumer group operating collectively and gathering data relating to mortgage lending and home ownership from a ‘grass roots’ perspective. Our members have evidence in their files (and ours) that show alarming patterns of bad bank lending practices. 

"BFCSA notes that 100% of all cases we have examined are infected with fraud. All loans uncovered are approved, despite the banks being cognisant of the true income as to centrelink payments etc. These loans were unaffordable from inception.  

"Only a cartel could engineer such a structure, strategy and policies in order to engage in unsafe practices from an economic point of view. Control fraud activities such as those warned against by Prof William K Black, cannot continue to be ignored as occurred in the USA and other nation states. 

"It is the banking cartel members in 2005 who boasted a $100 billion market in targeting 'ARIP’s'. Not only did this announcement expose an undesirable intention but rather is a key indicator that double the stated quota was reached. 

"We did not escape the GFC, but we did allow bankers to continue to sell unaffordable loans to vulnerable citizens. The borrowers were not buyers. They were hunted down in their homes. There is no integrity in the banking files we have uncovered. 

"A Royal Commissioner is desperately needed in Australia to ensure the 17 identifiable bankers are questioned with authority and compelled to answer tough but important questions. 

"We survey members from time to time and we can see alarming patterns emerge, along with key indicators of a crimogenic environment across all states and territories in Australia."

In the submission BFCSA also recommends:

• Every customer must receive a Loan Application Form (“LAF”) copy at the point of signing. That a second copy of the LAF will also be sent to the customer after the approval. This should minimise the fraud and forgery. 
• Credit Card applications must also be copied and given to the customer. 
• Sub Prime loans must be taken off the market because they force up property prices and distort the market. 
• All commissions to bankers and banker staff be stopped immediately. That sellers are acting as agents of the Bank and this is made clear to the public. 
• That the practice of ramping up of property prices by misusing LVR’s ie 130% LVR lending, in the interest of the Australian housing market, be investigated by the AFP. 
• Lenders (as members of the Cartel) to be investigated regarding sub-prime lending as to interfering with Homeownership, to the detriment of existing home owners.