Commonwealth Bank chief executive Matt Comyn has expressed hope the industry’s tarnished reputation has been partly repaired by how banks responded to the coronavirus pandemic, after lenders played a key role in shielding the economy from the shock.
In comments marking two years since the banking royal commission’s final report, Mr Comyn, who is also chairman of the Australian Banking Association, said the industry had taken steps to make sure “simply unacceptable” failures did not happen again.
Aside from a series of changes to banks’ policies that resulted from the explosive inquiry into financial misconduct, Mr Comyn also sought to highlight the importance of how banks dealt with customers on a daily basis, including during the economic shock sparked by COVID-19.
“Over the past two years, the banking industry has implemented significant changes to improve customer outcomes and ensure that issues identified in the royal commission do not re-occur,” Mr Comyn said in a statement.
“The royal commission’s recommendations and the industry’s response have been critical, but it is our actions and daily interactions with customers which will define our future standing in the community.
“Hopefully, the way our industry has responded to the coronavirus pandemic in providing support to individuals and businesses across Australia has gone some way to rebuilding our reputation. The lesson of the royal commission is that actions speak louder than words,” he said.
The royal commission into misconduct in financial services, led by former High Court judge Kenneth Hayne, rocked the financial sector after exposing a series of scandals. It made 76 recommendations for reform.
Almost two years after its final report was presented, banks point to a range of changes to industry policies including codes of conduct and changes to the law. There are other laws or changes to industry codes of conduct that have not yet come into effect, while the passage of other legislation was last year delayed by six months due to the coronavirus pandemic.
However, there are also some key areas where the government went against the commission’s recommendations – in particular the government’s plan to roll back responsible lending laws, which is fiercely opposed by consumer groups. It also ditched a royal commission recommendation to shake-up mortgage broker remuneration in 2019.
The government believes it is on track to meet its revised target of implementing the remaining royal commission recommendations on its plate by the end of June. Commissioner Hayne, who has not spoken directly on the commission since he delivered the report, declined to comment when contacted by The Age and The Sydney Morning Herald.
The delays to the rollout of banking reforms last year came as the COVID-19 response took centre stage among banks and regulators, with banks deferring repayments on more than $250 billion in loans.
While the government has pointed to COVID-19 to explain the delays in implementing some of the commission’s recommendations, critics are unconvinced, with Australian Lawyers Alliance spokesman Josh Mennen saying this claim did not pass the “pub test”. Mr Mennen, a lawyer at Maurice Blackburn, said axing banks’ responsible lending obligations was “a recipe for financial hardship.”
“Aspiring home owners should be given support and guidance in understanding their credit limitations. Instead they will have unprecedented access to credit with minimal accountability for banks and brokers who are riding high on an already inflated property market,” Mr Mennen said.
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