Bank inquiry announced by Federal Government

Bank inquiry announced by Federal Government
Bank inquiry announced by Federal Government

The federal government has announced an inquiry into specific cases of mistreatment of small business customers by banks.

It has been interpreted as a bid to take the steam out of Labor's call for a royal commission.

The government made the announcement minutes before Labor leader Bill Shorten moved a motion calling for a royal commission.

Kelly O'Dwyer, the Minister for Revenue and Financial Services, announced the inquiry. 

The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, will undertake the inquiry "into the adequacy of the law" to address concerns raised by the Parliamentary Joint Committee on Corporations and Financial Services in its report released in May this year.

It will examine selected cases identified by the committee regarding small business lenders to determine whether regulatory action is required.

Mr Shorten's motion, seconded by independent MP Bob Katter, noted that "scandals in the banking and financial services industry have led to retirees having their retirement savings gutted, families being rorted, small business owners losing everything, Life insurance policy holders being denied justice; and agricultural assets being improperly foreclosed; and despite several inquiries, new powers, new resources, and a Financial Ombudsman Service, the rorts and the rip offs continue."

The terms of reference for Ms O'Dwyer's inquiry are:

"In undertaking the inquiry, the Ombudsman should: review a selection of the cases that have been identified by the PJC as unfair and ascertain whether there are any deficiencies in the regulation of authorised deposit taking institutions in lending to small business; 

"refer any matters identified in the review to the relevant authority for further consideration as necessary;

"determine whether the regulatory deficiencies identified by the PJC, or additional deficiencies identified through the inquiry, are being addressed by subsequent Government and industry reforms; and

"recommend whether additional reform measures should be implemented (legislation, regulations, guidance and practices) to ensure products perform in the way they should, taking into account that consumers have a responsibility to accept their financial decisions, including market losses, when they have been treated fairly, and any impact on the availability and cost of credit to small business."

The inquiry will take 12 weeks.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

Tags: 
Federal Government Banking Inquiry

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