Treasurer Scott Morrison has hit back hard at the growing conga-line of people demanding a banking Royal Commission, describing the proposal as nothing more than a “populist whinge”. From The Canberra Times:
Bill Shorten’s push for a banking royal commission is a “populist whinge” that threatens to undermine a key pillar of the Australian economy, Treasurer Scott Morrison says.
Mr Morrison urged Mr Shorten to stop playing “reckless political games”, adding that the Opposition Leader’s policy had caused alarm overseas about the strength of Australia’s banking system…
“He is playing reckless political games with one of the core pillars of our economy. “He’s acting with callous disregard and complete political opportunism.
“I think there is the great risk that if opposition continues to engage in this recklessness that the only product of that approach could be to undermine confidence in the banking and finance system”…
A Fairfax/Ipsos poll in April found 65 per cent of voters support a royal commission into the banks while 26 per cent are opposed. Just over half of Coalition voters supported a royal commission.
That Mr Morrison opposes a banking Royal Commission is hardly surprising. He is, after all, a card carrying member of Australia’s ‘politico-housing complex’ given his deep ties to the property lobby and perceived industry capture.
Nevertheless, there is sufficient evidence of endemic misconduct from the banks to warrant such an inquiry.
First, there’s the banks’ manipulation of the bank bill swap rate, which they have shown no contrition over.
Second, there’s the 1000-plus examples whereby borrowers’ loan documentation has been forged (see here, here, here and here), again with little remorse shown; and
Third, there’s the banks overall dodgy lending standards, which “scares the hell” out of former NAB chief Don Argus.
Just last week, we witnessed another example of this misconduct when Today Tonight featured a report of predatory lending involving Westpac, whereby an elderly couple had been given a $489,000 30-year mortgage on an investment home that had a valuation of just $365,000. That’s a loan-to-value ratio (LVR) of 134%!
The couple knew nothing about this until they demanded to see the loan documentation two years later. The couple then found that their incomes had been inflated by around $60,000 and their liabilities reduced. The borrower’s signatures had also been forged.
Fast forward five years and the elderly couple have been left with a property worth around $350,000 and a loan of $489,000, as well as mortgage repayments they cannot meet.
Yet despite the obvious malfeasance, Westpac remains unrepentant. A spokesperson for Westpac gave a statement to Today Tonight noting that: “Internal and external reviews of the lending decision by Westpac and Mr and Mrs Downer have been completed and was found to be responsible and appropriate. We assess a customer’s capacity to repay a loan through… strict income verification and credit checks”.
Blind Freddy can see that the couple should never have been granted the loan. The LVR on the mortgage was 134%. The couple’s incomes were fraudulently inflated and their expenses reduced. And, given their old age, the couple had minimal prospect of repaying a 30-year mortgage.
But hey, those calling for a banking Royal Commission are engaging in a “populist whinge”.
