Following this morning’s explosive report in Fairfax about banks manipulating the bank bill swap rate, Labor leader Bill Shorten has ramped-up his call for a banking Royal Commission, attempting to paint Prime Minister Malcolm Turnbull into a corner. From The AFR:
“How much evidence will it take for to you [Malcolm Turnbull] to recognise that you’ve got to stop covering for the big banks? This evidence…and the new reports coming out of ASIC, show that there is a real and fundamental problem in our banking system, in many ways, it’s the last straw to break the already overloaded back of the camel,” he said.
“What we see here, reported in The Australian Financial Review, is we hear of tapes where a group of cowboys in the Westpac Bank are cynically talking about manipulating interest rate rates, which are affect every Australian. And what this means is that the business as usual approach advocated by Mr Turnbull is not good enough!
“It is not good enough to simply say that just doing more of the same with ASIC and doing that more intensely is going to change the banking culture. I wish that Mr Turnbull was a big enough leader of this country that, regardless of who wins the election after July 2, he would commit to there being a Royal Commission into the banking sector.”
The arguments for a banking Royal Commission are compelling.
In addition to the latest rate-rigging scandal, there is the 1000-plus examples whereby borrowers’ loan documentation has been forged by the banks, as revealed by LF Economics’ Lindsay David on Four Corners a few weeks back (watch from 36.00 onwards), as well as in LF Economics’ detailed submission to the 2016 Parliamentary Inquiry into Penalties for White-Collar Crime, which provided compelling evidence showing that Australia is a haven for white-collar criminality and control fraud.
There were further reports of mortgage fraud in News.com.au over the weekend:
NAB is the latest bank to launch an investigation after receiving a tip-off about a mortgage broker involved in a new tower development in Melbourne’s Southbank…
NAB has been told a broker used Photoshop to inflate figures on pay slips and bank statements in order to secure loans for overseas buyers.
“We are investigating these claims and will refer them to authorities if and when appropriate,” a spokeswoman for the bank told news.com.au.
It is understood that Westpac has also been contacted about the mortgage broker, but the bank declined to say whether any investigation had been launched when contacted by news.com.au.
DODGY LOANS
While the practice has long been portrayed as the work of a few bad apples in the competitive mortgage broking industry, evidence is emerging that senior banking employees themselves may be involved in mortgage fraud…
Hundreds of mum-and-dad borrowers have contacted the Banking and Finance Consumers Support Association with claims that lenders have forged their signatures on loan documents, with details of their personal income and assets bumped up by hundreds of thousands of dollars.
BFCSA President Denise Brailey says she has reported hundreds of such cases to the financial services regulator, ASIC.
Borrowers come to her for advice when they find themselves saddled with massive debts and their homes repossessed, after being sold loans that are beyond their ability to pay…
Among the documents in Ms Brailey’s files is a Westpac loan with a gross annual income allegedly inflated by a whopping $288,000.
And let’s not forget that earlier this month Fairfax’s Mark Bishop penned a convincing piece noting systematic fraudulent practices used by Australia’s banks.
The bottom line is that there’s only one way to get to the bottom of the banks’ dodgy dealings, and that’s by a banking Royal Commission.
While the Turnbull Government claims that ASIC has the powers to investigate such fraud, why hasn’t it done so already and where are the penalties?
