ME Bank asked by APRA to explain their home loan redraw access
The Australian Prudential Regulation Authority has approached ME Bank seeking information about its decision to remove access to money in redraw facilities linked to home loans.
It followed weekend Nine Entertainment newspaper reports that suggested ME Bank had made the move without appearing to have first contacted to client to inform of them.
In an explanation issued, ME claimed it had undertaken the move to help some customers and prevent them from falling behind on their original repayment schedules.
“…the redraw facility on some legacy home loans could lead to some customers falling behind their original repayment schedules,” it said.
“The redraw facility gives customers access to payments that they have made ahead of their repayment schedule."
ME Bank chief executive Jamie McPhee advised there had been "an adjustment to redraw accounts" which was not a change to a product.
“No money has been removed from customer accounts. The adjustment made is to the amount available for redraw,” the bank’s explanation said.
“We understand that the change has caused concern to some customers, particularly in the current environment," a bank spokesperson said.
"We are reviewing the personal circumstances of each customer affected and are committed to working with them to determine how we can help with their individual financial needs.”