Following the release of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry’s interim report last month, Australia’s banking sector was slammed for a “culture of greed” after countless examples emerged of customers – including the deceased – being charged for services they never received.
Now, the CEOs of Australia’s four biggest banks are facing scrutiny from a parliamentary committee, with Commonwealth Bank of Australia (CBA) boss Matthew Comyn, alongside Chief Risk Officer David Cohen, being the first to face the panel of federal members in Canberra on Thursday.
Comyn admitted that there had been “failures of judgement, failures of leadership and greed” within his institution, adding that CBA “became complacent” when it came to addressing customer issues uncovered by Commission Hayne’s inquiry.
Comyn also slammed the practice of ‘fees for no service’, particularly the practice of continuing to charge fees to customers after they had passed away. Describing it as “completely reprehensible conduct”, Comyn said two advisors had been sacked in relation to the issue while another dissolved his partnership.
“It’s unacceptable conduct that should never have occurred,” he said. “We have been too slow to identify problems, too slow to fix underlying issues, and too slow to put things right with customers. We became complacent.
“Our capability has been inadequate in critical areas, particularly operational risk and compliance. We have underinvested in prevention even though we have invested significantly in customer remediation. This is completely unacceptable.”
The hearing also shone a light on some of the real Australians who have been affected by misconduct, as Shadow Minister for Justice Clare O’Neil shared three heartbreaking stories about customers who’d suffered in relation to the treatment they received from Commonwealth Bank.
“The first thing I want to make clear is how incredibly hurt people have been by some of the actions of your institution and others,” O’Neil said. “I’ve met a lot of people who have had very significant mental health issues, from the treatment of your bank and others.”
Comyn responded by saying he acknowledged the “hurt and very, very difficult circumstances” that some customers had found themselves in as a direct result of CBA’s actions, revealing he has so far met with “less than 10” customers face to face, as well as speaking to many others over the phone.
He added: “There is no substitute from hearing that in person. I’ve spoken to a number of people over the phone, some face to face. When something goes wrong the consequences for individuals are very severe, I’ve seen that. They are harrowing stories for everyday Australians, that’s not lost on me for a moment.”
O’Neil went on to describe the situations of three people who had suffered due to banking misconduct, including the Perry family from Victoria who have not been able to plant crops, despite struggling financially due to the drought, because CBA has not provided them with a facility to do so.
Another case was that of a young mother who lost her house after falling victim to fraud, allegedly conducted by CBA staff. O’Neil said: “She now lives in a rooming house and she has been in conflict with your institution now for 12 years. The way she has been treated is nothing short of despicable.
“Twelve years of her life have been devoted to trying to get her house back. Your bank has put her through a legal hell.”
Westpac CEO Brian Hartzer is due to front the hearing on Thursday afternoon, while ANZ chief executive Shayne Elliott will appear on Friday and National Australia Bank boss Andrew Thorburn will appear next week.
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