The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, also known as the Banking Royal Commission and the Hayne Royal Commission, was a royal commission established on 14 December 2017 by the

Australian government The Australian Government, also known as the Commonwealth Government, is the national government of Australia, a federal parliamentary constitutional monarchy. Like other Westminster-style systems of government, the Australian Governmen ...

pursuant to the Royal Commissions Act 1902 to inquire into and report on misconduct in the banking,

superannuation A pension (, from Latin ''pensiō'', "payment") is a fund into which a sum of money is added during an employee's employment years and from which payments are drawn to support the person's retirement from work in the form of periodic payment ...

, and

financial services Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, ...

industry. The establishment of the commission followed revelations in the media of a culture of greed within several Australian financial institutions. A subsequent parliamentary inquiry recommended a royal commission, noting the lack of regulatory intervention by the relevant government authorities, and later revelations that financial institutions were involved in

money laundering Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdicti ...

for drug syndicates, turned a blind eye to terrorism financing, and ignored statutory reporting responsibilities and impropriety in foreign exchange trading. The Honourable Kenneth Madison Hayne , the former

Justice Justice, in its broadest sense, is the principle that people receive that which they deserve, with the interpretation of what then constitutes "deserving" being impacted upon by numerous fields, with many differing viewpoints and perspective ...

of the

High Court of Australia The High Court of Australia is Australia's apex court. It exercises original and appellate jurisdiction on matters specified within Australia's Constitution. The High Court was established following passage of the '' Judiciary Act 1903''. ...

, served as the sole commissioner and submitted an interim report to the

Governor-General of Australia The governor-general of Australia is the representative of the monarch, currently King Charles III, in Australia.tabled in parliament by the Government on the same day. The Royal Commission conducted seven rounds of public hearings over 68 days, called more than 130 witnesses and reviewed over 10,000 public submissions. Commissioner Hayne submitted a final report to the Governor-General on 1 February 2019 with 76 separate recommendations. The final report and the government's response to the report were made public on 4 February 2019.

Background

In 2008, a whistleblower went to ASIC to report a coverup in the Commonwealth Bank of Australia for a former financial planner. Michelle Grattan characterised the then-incoming Abbott Liberal-National government as being "determined to weaken protections" that Labor had introduced, although she noted these attempts were defeated by the Senate crossbench. In light of an account fraud scandal at US-bank

Wells Fargo Wells Fargo & Company is an American multinational financial services company with corporate headquarters in San Francisco, California; operational headquarters in Manhattan; and managerial offices throughout the United States and intern ...

, on 5 May 2014 ABC TV ''

Four Corners The Four Corners is a region of the Southwestern United States consisting of the southwestern corner of Colorado, southeastern corner of Utah, northeastern corner of Arizona, and northwestern corner of New Mexico. The Four Corners area ...

'', in conjunction with Fairfax journalists, broadcast an exposé of a sales-driven culture within the

Commonwealth Bank The Commonwealth Bank of Australia (CBA), or CommBank, is an Australian multinational bank with businesses across New Zealand, Asia, the United States and the United Kingdom. It provides a variety of financial services including retail, busine ...

's (CBA) financial planning division, that was described as profit at all cost. Chaired by

Labor Labour or labor may refer to: * Childbirth, the delivery of a baby * Labour (human activity), or work ** Manual labour, physical work ** Wage labour, a socioeconomic relationship between a worker and an employer ** Organized labour and the la ...

Senator A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...

Mark Bishop, a subsequent

Senate A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...

committee inquiry recommended a royal commission into the fraud scandal that left thousands of CBA customers millions of dollars out of pocket. The committee reported on the performance of the

Australian Securities and Investments Commission The Australian Securities and Investments Commission (ASIC) is an independent commission of the Australian Government tasked as the national corporate regulator. ASIC's role is to regulate company and financial services and enforce laws to pro ...

(ASIC). Several days later, CBA

chief executive A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...

Ian Narev Ian Mark Narev (born 22 April 1967) is the CEO of SEEK Limited. He is a former managing director and chief executive officer of the Commonwealth Bank Group commencing these roles on 1 December 2011 and being succeeded by Matt Comyn. Narev was ...

apologised unreservedly to customers who lost money in the bank's financial planning scandal.

Treasurer A treasurer is the person responsible for running the treasury of an organization. The significant core functions of a corporate treasurer include cash and liquidity management, risk management, and corporate finance. Government The treasury ...

at the time,

Joe Hockey Joseph Benedict Hockey (born 2 August 1965) is a former Australian politician and diplomat. He was the Member of Parliament for North Sydney from 1996 until 2015. He was the Treasurer of Australia in the Abbott Government from 18 September ...

, whose mother was impacted by the scandal, stated that the bank did not act quickly enough to address the problem. The CBA was subsequently embroiled in other matters including money laundering for drug syndicates, turning a blind eye to terrorism financing, ignoring statutory reporting responsibilities for more than three years on more than 750,000 accounts, and impropriety in foreign exchange trading. The

National Australia Bank National Australia Bank (abbreviated NAB, branded nab) is one of the four largest financial institutions in Australia (colloquially referred to as "The Big Four") in terms of market capitalisation, earnings and customers. NAB was ranked 21st-la ...

(NAB) was implicated during 2015 in a series of scandals concerning financial planners where it was revealed that the NAB quietly paid millions of dollars in compensation to hundreds of clients for what it considered was inappropriate financial planning advice by its staff between 2009 and 2015. A

whistleblower A whistleblower (also written as whistle-blower or whistle blower) is a person, often an employee, who reveals information about activity within a private or public organization that is deemed illegal, immoral, illicit, unsafe or fraudulent. Whi ...

claimed that there was a volatile, toxic and Machiavellian culture within NAB. ASIC banned NAB staff who were previously licensed to provide financial advice. Subsequently, it was revealed that NAB were also implicated in impropriety in foreign exchange trading.

Westpac Westpac Banking Corporation, known simply as Westpac, is an Australian multinational banking and financial services company headquartered at Westpac Place in Sydney, New South Wales. Established in 1817 as the Bank of New South Wales, ...

was implicated in allegations that it rigged one of Australia's key interest rates, the bank bill swap rate and was sued under responsible lending laws for using an automated process to decide whether peoples' home loan applications met lending criteria. Further, a Westpac banker was imprisoned for fraudulently lending millions of dollars to elderly pensioners. Following ASIC investigations, Westpac was instructed to make a donation of $3 million to Financial Literacy Australia after ASIC found that the bank's employees disclosed confidential details of their clients' orders to other foreign exchange traders. Westpac refunded $65 million to 220,000 customers after it failed to pass on benefits they should have received under package deals, including home loans, credit cards and transaction accounts, offered by the bank. The

ANZ Bank ANZ may refer to: People * Anz (musician), a British DJ and electronic musician Banks * ANZ (bank), Australia and New Zealand Banking Group Limited, the fourth-largest bank in Australia ** ANZ Bank New Zealand, the largest bank in New Zealand * ...

(ANZ) was also implicated in the bank bill swap rate scandal and settled with ASIC prior to the commencement of legal proceedings.

Macquarie Bank Macquarie Group Limited () is an Australian global financial services group. Headquartered and listed in Australia (), Macquarie employs more than 17,000 staff in 33 markets, is the world's largest infrastructure asset manager and Australia's t ...

was implicated in the foreign exchange trading scandal and was instructed to donate $2 million to charity and to open up its foreign exchange arm to scrutiny after ASIC uncovered a series of breaches by its traders. Appearing before the

House of Representatives House of Representatives is the name of legislative bodies in many countries and sub-national entitles. In many countries, the House of Representatives is the lower house of a bicameral legislature, with the corresponding upper house often c ...

Standing Committee on Economics, chief executives of the ANZ, CBA, NAB, and Westpac advised that, despite consumer complaints, very few senior bank staff were dismissed due to misconduct; despite supervising more junior staff who had been dismissed. In June 2015, Greens senator

Peter Whish-Wilson Peter Stuart Whish-Wilson (born 24 February 1968) is an Australian politician who has been a Senator for Tasmania since 2012, representing the Australian Greens. Formerly a lecturer in economics at the University of Tasmania, Whish-Wilson was ap ...

put forward a motion for the Abbott government to hold a royal commission into misconduct in the financial services industry. The motion was voted down in the Senate 39–14, with Labor and the government opposing it. In a 2016 speech before the

National Press Club Organizations A press club is an organization for journalists and others professionally engaged in the production and dissemination of news. A press club whose membership is defined by the press of a given country may be known as a National Pre ...

, opposition leader

Bill Shorten William Richard Shorten (born 12 May 1967) is an Australian politician currently serving as Minister for Government Services and Minister for the National Disability Insurance Scheme since 2022. He previously served as leader of the opposition ...

outlined his plans for a royal commission into the banking sector, should Labor win government at the 2016 federal election. Meanwhile, Liberals

Warren Entsch Warren George Entsch is an Australian politician who has been a member of the House of Representatives from 1996 to 2007 and since 2010, representing the Division of Leichhardt. He is a member of the Liberal National Party of Queensland, and si ...

also supported calls for a royal commission; as well as CBA whistleblower, Jeff Morris, who, for eight years, since 2008, documented the industry's "systemic bad behaviour". Despite an attempt launched in April 2016 to protect consumer interests, increase transparency and accountability, and build trust and confidence in banks, amidst growing community concerns, in January 2017 twenty-five members of the

Australian Banking Association The Australian Banking Association (ABA), formerly the ''Australian Bankers' Association'', is the trade association for the Australian banking industry. The ABA was founded in 1985 and is based in Sydney, New South Wales. The ABA represents twe ...

launched ''Better Banking'', an initiative aimed to provide improve products, service and culture, and to provide consumers with helpful information and resources. In April 2016 Steve Sedgwick , a former senior Australian public servant, was commissioned to conduct a review into bankers' pay and commissions; and recommended the termination of bonus payments to retail bank employees that are linked to sales performance. In March 2017 ASIC handed down a report on financial advice compliance in the sector; and in September 2017 the Turnbull government introduced legislation to establish the Australian Financial Complaints Authority, an external dispute resolution body aimed to simplify how customers resolve complaints with bank and other financial services organisations. Over the preceding years, there had been widespread criticism of ASIC's activities as a regulatory body, including its supervision of banks. In late 2017, as a backlash against the legalisation of same sex marriage, the Nationals threatened to introduce a

private member's bill A private member's bill is a bill (proposed law) introduced into a legislature by a legislator who is not acting on behalf of the executive branch. The designation "private member's bill" is used in most Westminster system jurisdictions, in wh ...

calling for a commission of inquiry into the banking system. It was reported that the bill would be co-sponsored by the Nationals,

the Greens The Greens or Greens may refer to: Current political parties *Australian Greens, also known as ''The Greens'' *Greens of Andorra * Greens of Bosnia and Herzegovina *Greens of Burkina * Greens (Greece) * Greens of Montenegro *Greens of Serbia *Gree ...

and Senate crossbench parties. Nationals Senator

Barry O'Sullivan Barry James O'Sullivan (born 24 March 1957) is an Australian politician who was a senator for Queensland from 11 February 2014 until 30 June 2019. He is a member of the Liberal National Party of Queensland (LNP) and sat with the Nationals in ...

, and LNP MPs

George Christensen George Robert Christensen (born 30 June 1978) is a former Australian politician and former journalist who was a member of the Australian House of Representatives from 2010 to 2022, as the member of parliament (MP) for the division of Dawson. He ...

and Llew O'Brien, together with the Greens, Labor, and Senate crossbench parties, had enough numbers to force the Turnbull government's opposition to a royal commission. In the 2017 federal budget, the Turnbull government proposed the introduction of a bank tax (or levy) that applied to banks with liabilities of at least $100

billion Billion is a word for a large number, and it has two distinct definitions: *1,000,000,000, i.e. one thousand million, or (ten to the ninth power), as defined on the short scale. This is its only current meaning in English. * 1,000,000,000,000, i. ...

. The levy came into effect on 1 July 2017. With political pressure mounting, on 30 November 2017 Turnbull and his Treasurer,

Scott Morrison Scott John Morrison (; born 13 May 1968) is an Australian politician. He served as the 30th prime minister of Australia and as Leader of the Liberal Party of Australia from 2018 to 2022, and is currently the member of parliament (MP) for th ...

, announced plans for a royal commission. The royal commission was established on 14 December 2017.

Terms of reference

On 14 December 2017, the

Governor-General Governor-general (plural ''governors-general''), or governor general (plural ''governors general''), is the title of an office-holder. In the context of governors-general and former British colonies, governors-general are appointed as viceroy t ...

Sir

Peter Cosgrove General (Australia), General Sir Peter John Cosgrove, (born 28 July 1947) is a retired senior Australian Army officer who served as the 26th governor-general of Australia, in office from 2014 to 2019. A graduate of the Royal Military College, ...

issued Commonwealth

letters patent Letters patent ( la, litterae patentes) ( always in the plural) are a type of legal instrument in the form of a published written order issued by a monarch, president or other head of state, generally granting an office, right, monopoly, tit ...

appointing the commissioner and the commission's

terms of reference Terms of reference (TOR) define the purpose and structures of a project, committee, meeting, negotiation, or any similar collection of people who have agreed to work together to accomplish a shared goal. Terms of reference show how the object ...

. The commissioner was directed "to inquire into and report on misconduct in the banking, superannuation and financial services industry." It was due to table its final report on 1 February 2019, which had been noted to be not long before the

2019 Australian federal election The 2019 Australian federal election was held on Saturday 18 May 2019 to elect members of the 46th Parliament of Australia. The election had been called following the dissolution of the 45th Parliament as elected at the 2016 double dissolut ...

Response

The creation of the Royal Commission was supported by the Opposition leader,

; however, opposition treasury spokesperson,

Chris Bowen Christopher Eyles Guy Bowen (born 17 January 1973) is an Australian politician who has been Minister for Climate Change and Energy in the Albanese government since June 2022. He is a member of the Australian Labor Party (ALP) and was first elec ...

, stated that Labor disagreed with the terms of reference and wanted the Government to consult with consumer groups and those impacted by financial scandals. Meanwhile,

sought to widen the commission's terms of reference. The Australian Banking Association, and some of its members, who initially opposed calls for a royal commission, supported the terms of reference; however the Association's CEO,

Anna Bligh Anna Maria Bligh (born 14 July 1960) is a lobbyist and former Australian politician who served as the 37th Premier of Queensland, in office from 2007 to 2012 as leader of the Labor Party. She was the first woman to hold either position. In ...

warned that the commission could push up interest rates. As revelations of misconduct came to light during the hearings, political pressure was exerted on the Turnbull government, due to beliefs that it had delayed the establishment of the Royal Commission; and Mathias Cormann, the Finance Minister, indicated that if Commissioner Hayne sought more time to extend the life of the Royal Commission, the government would respond positively.

Commissioner and executive

On 1 December 2017 Turnbull announced the appointment of

Kenneth Hayne Kenneth Madison Hayne (born 5 June 1945) is a former Justice of the High Court of Australia, the highest court in the Australian court hierarchy. Early life and education Hayne was born in Gympie, Queensland and attended Scotch College, Melbou ...

as the sole commissioner for the royal commission. Commissioner Hayne subsequently announced that he would be assisted by

legal counsel A lawyer is a person who Practice of law, practices law. The role of a lawyer varies greatly across different Jurisdiction, legal jurisdictions. A lawyer can be classified as an advocate, attorney at law, attorney, barrister, canonist, canon l ...

including Rowena Orr KC, Michael Hodge, Albert Dinelli, Eloise Dias, and Mark Costello.

Powers

The powers of Royal Commissions in Australia are set out in the enabling legislation, the Royal Commissions Act 1902. Royal Commissions, appointed pursuant to the Royal Commissions Act or otherwise, have powers to issue a

summons A summons (also known in England and Wales as a claim form and in the Australian state of New South Wales as a court attendance notice (CAN)) is a legal document issued by a court (a ''judicial summons'') or by an administrative agency of governme ...

to a person to appear before the Commission at a hearing to give evidence or to produce documents specified in the summons; require witnesses to take an oath or give an affirmation; and require a person to deliver documents to the Commission at a specified place and time. A person served with a summons or a notice to produce documents must comply with that requirement, or face prosecution for an offence. The penalty for conviction upon such an offence is two years imprisonment. A Royal Commission may authorise the

Australian Federal Police The Australian Federal Police (AFP) is the national and principal federal law enforcement agency of the Australian Government with the unique role of investigating crime and protecting the national security of the Commonwealth of Australia. ...

to execute

search warrant A search warrant is a court order that a magistrate or judge issues to authorize law enforcement officers to conduct a search of a person, location, or vehicle for evidence of a crime and to confiscate any evidence they find. In most countries, ...

Submissions

The Commission invited individuals or entities to make public submissions using an online form, with provision for those who require further assistance via email or telephone. The purpose of the submissions was to identify the nature of alleged misconduct, the factors that led to the misconduct occurring, and the steps taken to resolve the complaint and the outcomes of the complaint. The role of the commission was not to resolve individual complaints, yet to come to an understanding of the systematic failures that may have led to the complaint occurring. The Royal Commission conducted seven rounds of public hearings over 68 days, called more than 130 witnesses and reviewed over 10,000 public submissions of which the leading matters related to

personal finance Personal finance is the financial management which an individual or a family unit performs to budget, save, and spend monetary resources over time, taking into account various financial risks and future life events. When planning personal fi ...

, and small business finance. The commissioner identified a number of themes, as follows: #Some Features of the Australian Banking Industry: Background Paper #Some Features of the Australian Mortgage Broking Industry: Background Paper #Some Features of Car Financing in Australia: Background Paper #Everyday Consumer Credit - Overview of Australian Law Regulating Consumer Home Loans, Credit Cards and Car Loans: Background Paper

Public hearings

Initial proceedings commenced on 12 February 2018. Key comments made by the Commissioner during this hearing and elsewhere include:

Consumer lending practices

The first round of public hearings commenced on 13 March, and these were focused on consumer lending practices within the context of credit products such as home loans, car loans and credit cards. Over fourteen days, the Royal Commission heard from executives from ANZ Bank, APRA, ASIC,

Aussie Home Loans Aussie is an Australian retail financial services group with operations spanning all mainland capital cities and major regional centres throughout Australia. , Aussie reported a loan book under management of over A$42 Billion through 750 bro ...

Citigroup Citigroup Inc. or Citi ( stylized as citi) is an American multinational investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking giant Citicorp and financial conglomera ...

, Commonwealth Bank, the

Finance Sector Union The Finance Sector Union of Australia (FSU) is a white collar trade union that represents professionals working in the Banking, Finance, Insurance and Superannuation industries in Australia. The FSU was formed from the amalgamation in 1991 of va ...

ING Bank The ING Group ( nl, ING Groep) is a Dutch multinational banking and financial services corporation headquartered in Amsterdam. Its primary businesses are retail banking, direct banking, commercial banking, investment banking, wholesale banki ...

, NAB, Smartline HomeLoans and Westpac. Before the Royal Commission: The Royal Commission heard that ANZ had failed to accurately verify the living expenses of home loan customers referred to the bank by mortgage brokers, believing that this was the responsibility of the brokers, in spite of a

conflict of interest A conflict of interest (COI) is a situation in which a person or organization is involved in multiple interests, financial or otherwise, and serving one interest could involve working against another. Typically, this relates to situations i ...

in doing so; and that, due to processing issues, it had charged nearly 500,000 home loan customers the incorrect interest rate for more than ten years, leading the bank to overcharge customers by approximately $90 million. Commissioner Hayne questioned whether the CBA was "economical with the truth" in failing to tell customers the value of commissions it pays to mortgage brokers in return for selling its products. The Royal Commission also heard that due to a system of trailing commissions paid to mortgage brokers, the CBA rewarded brokers for encouraging customers to enter into larger homes loans and for longer terms than needed. The Royal Commission heard that the CBA-owned Aussie Home Loans retained commissions where broker agreements were terminated following detection of alleged fraudulent activity; and that it failed to refer such brokers to the industry association for disciplinary action. However, when queried on the matter by Counsel Assisting that "...there was fraudulent conduct engaged in by NAB bankers and by introducers... We see no reference here to any fraudulent conduct. In fact the language is very qualified in the description of the conduct here... the conduct was in breach of the group's policies and processes including provision of potentially unsuitable loans, reliance on potentially false documentation, use of correct income figures, potentially dishonest application of customers' signatures, and a potential misstatement of some loans in loan documentation. Now, what I want to put to you is that NAB knows and you know that there were unsuitable loans, there was false documentation, there was dishonest application of customers' signatures on consent forms and there was the misstatement of some loans in loan documentation. All of those things occurred, did they not?" NAB's Mark Waldron agreed that conduct was fraudulent and beyond misconduct; "Yes, we can now say that they have occurred." It was reported that NAB employees in greater western Sydney were accepting bribes in order to facilitate loans they knew were based on false documentation in order to reach lending targets and to collect personal bonuses; and up to 15 per cent of all home loans approved did not meet NAB's standard criteria for valuation, serviceability and document verification. The Commission heard that, similar to ANZ, Westpac believed that it was not its responsibility to verify loan applicants' personal expenses, with this responsibility resting with brokers, especially for car loans originated by motor vehicle dealers acting as brokers; and that financial kickbacks to car dealers reflected a conflict of interest.

Financial planning and wealth management

In mid-April 2018, the second round of hearings, focused on the financial planning and wealth management industry commenced. During this round, on 20 April 2018 Craig Meller resigned as CEO of

AMP Limited AMP is a financial services company in Australia and New Zealand providing superannuation and investment products, financial advice, and banking products (through AMP Banking) including home loans and savings accounts. Its headquarters is in Sy ...

after it was revealed in a public hearing before the Royal Commission that AMP charged clients for financial advice which was not provided, and misled

ASIC An application-specific integrated circuit (ASIC ) is an integrated circuit (IC) chip customized for a particular use, rather than intended for general-purpose use, such as a chip designed to run in a digital voice recorder or a high-efficie ...

on numerous occasions. In August 2018 it was revealed that NAB subsidiary,

MLC Limited MLC was an Australian business that provides investments, insurance and superannuation solutions to corporate, institutional, and retail customers. Due to divestments in the early 21st century, there are now two businesses, with no ownership lin ...

, had charged some of its customers "adviser contribution fees" and "employer service fees" on its superannuation products. By its own admission, NAB executives told the Royal Commission that the customers may have not received any service, in spite of being charge a fee. NAB tried to disguise these fees as commissions. The following month ASIC commenced

civil proceedings Civil law is a major branch of the law.Glanville Williams. ''Learning the Law''. Eleventh Edition. Stevens. 1982. p. 2. In common law legal systems such as England and Wales and the United States, the term refers to non-criminal law. The law rel ...

in the Federal Court alleging that NAB-owned superannuation entities had deducted $100 million in fees from more than 300,000 customers where services were not provided. Appearing before the Royal Commission in November 2018, NAB Chief Executive Officer

Andrew Thorburn Andrew Thorburn (born 13 April 1965) is an Australian-based businessman. Andrew Thorburn is a former CEO of Bank of NZ (BNZ), and also of National Australia Bank (NAB). Early life Thorburn was born in Melbourne and is a dual Australian–New Z ...

defended the fees-for-no-service issue as a “process issue” rather than dishonesty. Days earlier, NAB Chairman and former

Secretary A secretary, administrative professional, administrative assistant, executive assistant, administrative officer, administrative support specialist, clerk, military assistant, management assistant, office secretary, or personal assistant is a ...

of The Treasury Ken Henry defensively appeared before the Royal Commission, with some tense exchanges between Henry and Orr.

Small and medium enterprises

The third round of hearings commenced in mid-May 2018 and was focused on small and medium enterprises. Implications: SMEs are now looking towards other sources of finance; shadow lenders, private loans, bonds etc. The commission has also brought about changes in the provision of lending under the new industry code and granted ASIC new enforceable code of provisions.

Financial services and Indigenous communities

In July, proceedings moved to Darwin to examine financial services, particularly

funeral insurance Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...

, and how they impacted on Indigenous communities. The Royal Commission did not consider consumer leases, payday loans or in-store credit arrangements' impacts on Indigenous communities because they are not within the terms of reference. The discrepancy between average life expectancy of an Indigenous individuals and non-indigenous, highlights a fault in the superannuation system, where essentially individuals are restricted access to their super until 60 years. For many this is way too late and individuals need access to these funds to support themselves, their family and their community. To put this in perspective, the average life expectancy of an Indigenous male in the NT is 63.6 years.

Reports

On 28 September 2018 Commissioner Hayne submitted an interim report on progress of the commission to the Governor-General. The interim report, together with a volume each of case studies and appendices was tabled in Parliament on the same day. In its interim report, the Commissioner noted that some (mis)conduct by financial services entities was known to regulators and that the commission had also unearthed other conduct that brought public condemnation. The interim report focused on two key issues; why did it happen, and what can be done to avoid it happening again? In responding to the issue of 'why', the Commissioner determined that: In responding to the issue of 'what now', the Commissioner opined that: The Commissioner detailed that there would be a further round of public hearings to consider these and other questions, for consideration in the Commissioner's Final Report. The interim report contained substantial findings against banks, insurance companies, and financial planners. Commissioner Hayne handed his final report to the Governor-General on 1 February 2019. The final report comprised a 496-page document together with seven themes and 76 separate recommendations, supported by a volume each of cases studies and appendices. On 4 February 2019 the government issued its response to the Commissioner's recommendations.

Feedback on the final report

Commissioner Hayne did not make or name any specific individual who should face

criminal charges A criminal charge is a formal accusation made by a governmental authority (usually a public prosecutor or the police) asserting that somebody has committed a crime. A charging document, which contains one or more criminal charges or counts, can ...

. Instead, his report made 24 recommendations relating to institutions and individuals about dishonest misconduct and charged the regulators with the responsibility for taking action. Some media feedback was that this approach was part of the problem, citing that ASIC, in particular, had a long history of not proactively enforcing its powers. Some of Hayne's most scathing comments were reserved for NAB's chair, Ken Henry, and CEO, Andrew Thorburn: Despite initially defending their positions, by 7 February both Henry and Thorburn had announced their resignations. Financial markets initially responded positively to the final report, having earlier factored in that banks and other financial institutions would be severely penalised. Markets viewed the response from the government as measured and a view that some recommendations would help the financial services sector.

References

External links

*
Video archive
of all the testimonies gathered during the Royal Commission's public hearings. * * {{Commonwealth of Australia Royal Commissions , state=autocollapse Banking, Superannuation and Financial Services Industry 2017 in Australia 2017 establishments in Australia 2018 in Australia Turnbull Government Banking in Australia Banking controversies 2019 disestablishments in Australia Morrison Government