Day 509: 'Welcome news'
Counting the days since the banking royal commission was established.
Good afternoon, and welcome to day 509.
Today in summary: Labor’s “Fair Go Budget Plan” confirms Banking Fairness Fund Levy costings; NAB is ditching some of its questionable fees; ASIC has launched three regtech events; and the ABA has established a lending project to investigate challenges to credit flow.
-- Alex
@AlexESampson
Current banker panic level: 🤑💩🤓 🧐
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Labor’s “Fair Go Budget Plan”, released today, reveals ongoing costings for its proposed Banking Fairness Fund Levy. The levy will start at A$105 million in 2019-20, jumping up to A$198m in 2020-21, and back down to A$158m in 2021-22 and 2022-23. Labor had allocated A$40 million over four years for a telephone legal advice service, $320m for financial counselling, A$120 m for financial rights lawyers, $60m for family violence, $60m for no interest loans, and $40m for emergency relief grants for families who need immediate financial assistance.
NAB is ditching some of its questionable fees (the bank calls them “complex and confusing” fees). The first 50 fees will be removed by the end of June with a view to addressing “hundreds more” over the next two years. The first round includes removing the A$10 NAB Connect monthly service fee for internet banking for business customers, which is applied to about 65,000 customers. It will also include a waiver of the bank’s A$15 late payment fee on consumer and commercial credit card payments for customers who have paid the minimum monthly amount due on time in the previous 11 months. A spokesperson told Australian Banking Daily that roughly 40% of complaints to the bank related to fees.
Since the royal commission NAB has or is in the process of taking action on 26 of the final report’s recommendations.
The bank today said it had launched initiatives to improve transparency, including SMS reminders for consumer credit card payment due dates and amounts. NAB has abolished, starting October 1 this year, its controversial “introducer” payments program which paid commissions to members of the public who referred new home loan customers to the bank. It also agreed to a stay of execution on regional and rural bank branches until 2021 and will extend the protections of the Banking Code of Practice to small businesses with less than A$5 million in total borrowings, up from A$3 million.
SMH | AFR | Herald Sun
ASIC has launched three regtech events in conjunction with industry and other stakeholders to promote adoption among Australian financial services organisations. The corporate regulator said these events — to run in Sydney across August — were designed to be an opportunity for regtech startups, scaleups and financial services organisations’ in‑house development teams to improve business, such as improving the detection of problematic financial advice in datasets.
The Australian Banking Association has established a lending project to identify and raise with regulators some of the challenges impacting the flow of credit to consumers and SMEs across the economy. As part of the project, the ABA is preparing submissions to ASIC’s consultation on RG 209: Responsible Lending Conduct, and APRA’s APS 220 Credit Risk Management discussion paper.
Meanwhile, the ABA’s royal commission taskforce met this week for the fifth time to continue the work on implementation the recommendations of Hayne’s final report. This week it focused on changes to the Banking Code of Practice.
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Today’s burn prize: Shadow treasurer Chris Bowen
“We’ll pay for our plan by closing unfair and unsustainable tax loopholes and handouts that go to the top end of town.”
Bowen defended the costings in Labor’s “Fair Go Budget Plan”, released today.
The Commentariat
RBA governor Phil Lowe is waiting to see what happens in labour markets before making changes to interest rates, writes AFR columnist Karen Maley. She argues many of the pre-conditions for cutting rates are “undoubtedly” in place and it would take a boost in jobs and rising commodity prices to prevent a cut.
“Because of the confusion in signals, it’s likely that he’ll closely scrutinise a range of labour market indicators – including the unemployment rate, job ads, and business conditions, as well as the wage price index due to be released next month – before making the decision to cut official rates below the 1.5 per cent level they’ve sat at since August 2016.”
AustralianSuper has a plan to manage the post-Hayne deluge, columnist John Durie writes in The Australian. Durie points to the super giant’s annual strategy meeting this year where executives formed a plan to maintain the performance needed to keep funds flowing.
“The change in style should be welcome news to corporate Australia which has long complained about the market’s short-term horizon and the good news is AustralianSuper’s Mark Delaney has no plans to tell them how to run their business but he wants to know how they are going to add value.”
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