Royal Commission goes after members of the Big Four

By Michael Mata

Royal Commission goes after members of the Big Four

All members of the Big Four will be closely examined in the opening round of hearings from the Royal Commission, which is examining misconduct in the banking sector.

The commission’s first targets were revealed on Monday, with the corporate watchdog expanding its case against Commonwealth Bank of Australia (CBA), which it accuses of trying to rig one of the most important interest rates in Australia.

The Australian Securities and Investments Commission (ASIC) said in its statement of claim filed in the federal court that CBA had attempted to rig the bank bill swap rate on six occasions, up from the three occasions in its initial statement in January.

The Royal Commission, led by the Honourable Kenneth Hayne, said on Monday that the first round of hearings, to be held in March, would examine case studies covering areas such as home loans, auto loans, credit cards, and credit offers.

The first topic to be examined will be residential mortgages, with the commission closely assessing case studies involving National Australia Bank (NAB), CBA-controlled Aussie Home Loans, and CBA.

NAB’s practice of paying “introducers” (i.e. people outside the bank who’re allowed to collect fees for referring customers) will be assessed. Scrutiny was heightened after NAB revealed last year that 20 bankers had been sacked or asked to resign for breaching its home-loan policies.  

The commission will also look into “fraudulent brokers” within Aussie Home Loans, after the corporate watchdog banned several brokers in recent years for submitting false or misleading documents.

CBA’s “accreditation of brokers and broker arrangements” is another area to be closely examined.

Also read: Royal Commission investigates lax lending standards