15 stops. 40 minutes. each day.

Tag: Banking Code of Practice

NAB treats 3rd generation farmers like 2nd rate citizens, whilst sponsoring “2012 – Year of the Farmer”

It all started with a request for my email address from a good friend who lives out in Dubbo. Said he had information for me about a local family that was being screwed by the NAB. A few hours later, 5 emails came through, and one by one described the awful situation that a brother and sister were facing.

Claire and her brother Chris are 3rd generation farmers, on a property that has been in their families hands for over 100 years. Their property is a mix of cattle, wheat and cotton farming, surrounded by pristine nature, and bordered by the Macquarie and Barwon rivers, in the North West of NSW. This is their home. Now all of this is about to taken away from them. Surviving 9 years of drought, this is a family who couldn’t be destroyed by Mother Nature’s worst but now they find themselves about to be evicted by parasitic, immoral, impatient bankers from National Australia Bank.

In a time where most loans are around the 7-12% mark, NAB has made millions from the percentage gap on what we pay, compared to what they pay for the money – especially in this post GFC world, whereby banks can practically steal the money from the Reserve Bank, both here and the US Federal Reserve.

Yet, the opportunity to make even more money is always so very temping, and thus when the farmers came to them to assist, and at a time where there was the best opportunity to trade out of debt came from the sky in early 2010, when the Boxing Day 2009 rains finally broke the drought, they couldn’t help but take full advantage of the situation.

The rains gave these farmers, who provide our entire state with food, who have been struggling for so many years, an incredible climatic opportunity to address the debt bought about by nine years of drought. But the NAB told them to sell the farms without a crop in the ground or deal with the default rate of their 18% interest loan as they refused to advance anymore finance to grow crops when the drought broke  18%! Most credit cards aren’t that high these days. And this is after 9 years of drought, and a flood.

Because Claire and Chris refused to sell up before taking advantage of the best season to trade out of debt, they went ahead sowed the 2010 wheat crop. They then were then served Farm Debt Mediation that forced unreasonable obligations on them that did not take into consideration a Natural Disaster, because of this they breached their Farm Debt Mediation agreement (one clause being to repay $1million to the NAB by January 2011 based on the 2010 wheat crop). With help from local people they got by, and managed to not have to sell the farm in early 2010, they sowed the 2010 wheat crop which proved their viability by growing an 18,000 tonne (about $5million) wheat crop only to see it destroyed by the November 2010 floods.

If the NAB had assisted them to use the abundance of water that had returned to the Macquarie river because of the incredible season in 2010 they would have been able to use this income to make up for the loss of the 2010 wheat crop, however the NAB refused to maintain the farms, and in the same year the NAB assisted Cubby Station to grow cotton when it was in administration. At the time the NAB called in Chris and Claire’s loan. They were told they had 49% equity but it was of no use to them as they could not get finance to continue to grow crops. Refinancing was made impossible because it appears that once the NAB eliminates you and Farm Debt Mediation is served, other financiers are reluctant to assist, especially when credit was near impossible due to the GFC.

 They were never in the financial crisis Cubby Station was in, yet they were crucified and blocked by the NAB of having any hope of running the land profitably as the NAB did for Cubby Station in 2010.

All options are being investigated to fix this situation, reluctantly they put the farms up for sale by auction on November 17, 2011 to show the NAB they had tried, they failed to sell and now the NAB are seeking possession. Usually a farmer is given the chance to sell again in six months and keep the farms running and using every environmental opportunity possible to bring income in until it is sold satisfactorily, but not in this case. Investors have been and are being sought; a community and equity partnership with the Aboriginal Community of Brewarrina and Walgett was very well received by the Department of Education, Employment and Workplace Relations (who is conducting a feasibility study) and the NAB initially.

Cameron Clyne is the NAB CEO who is at the forefront of NAB Reconciliation Action Plan, and Glenn Brennan NAB Indigenous Affairs Manager, however, both seem to be full of talk and no action. This isn’t about not wanting to pay the money back. This is about being a farmer at the mercy of Mother Nature, and now of this prestitute bank, ironically being a main supporter of “2012 – Australian Year of the Farmer”, and making over $1.4billion profit in Q2 (Oct-Dec 2011) + record profits in 2011 –  is unable to wait for the study to be completed(End April) and has given an earliest date of eviction of the 12th April.

The NAB has shown their determination in this matter, without a thought for the big picture. To not even wait 12 months for a full cycle of growth. To not even wait while the head of the family, their father, Gordon Priestley lay dying in hospital whilst they were also isolated again in the February 2012 floods. The NAB were requested twice to defer the Supreme Court proceedings as it was impossible for Chris and Claire to file a defence due to Chris being isolated on the farm due to the floods and Claire caring for her father in Dubbo and then Brewarrina Hospital where he passed away on February 19, 2012. They were also told that the DEEWR feasibility study into their Aboriginal proposal needed time to be completed by end of April, but they were told that the debt is out of control and the interest is accumulating too much and that Aboriginal projects take too much time, however they did not mention that the NAB are in a partnership with Indigenous Business Australia the main funding body for such projects..

And so while the NAB continued its relentless pursuit, they left their father in hospital to meet with a solicitor to see if he would represent them on February 20. Their father passed away while they were trying to get legal help, yet bravely, only the next day they attended court in Sydney where the Louis-Vuitton clad lawyer for NAB still showed no mercy, all the while her high-end labels cloaking the heartless corporation that lives beneath and clocking up legal fees Chris and Claire Priestley will have to pay. In addition to this, they have been trying to get Centrelink to assist them for living costs as when they asked the NAB for living money when their father was dying they were refused and told that the NAB had already been good to them.

This bank who promotes itself as “More Give, Less Take” is its own antithesis of what it promotes.

It’s time to truly understand and appreciate the integral work that our farmers do, and the challenges they face. The NAB claims this family has broken their contract, yet at the same time, the NAB is blatantly breaching theBanking Code of Conduct. 

Today – 10th December marks a day they will never forget. The courts have judged against them, and they have until 9am to get out.

I don’t know what to do, how to help. I don’t know how they must be feeling. Devastation is an underrated word.
This all ties in with the Banking Code of Practise, and I can promise, NAB – You have not heard the last of us. You will be held accountable. You will be brought into the light. And you will be ashamed.

Are you being served? Complaints against banks go unheard by independent committee.

In approximately 3 weeks ( NB- was originally written in Aug 2012 – still yet to make the floor) , a Private Members bill, submitted by Independent MP-Andrew Wilkie, will be presented to the Parliament.

The bill, known as the Banking Amendment (Banking Code of Conduct) Bill, requests the Australian Government to make it mandatory for all banks conducting business in Australia to adhere to a set of rules governing their behaviour towards individuals and small businesses, with breaches of this new code allowing APRA to name and shame the banks publically, and sanctioning fines for grievous or continuous breaches of the code.

New code?
That would mean there is a current code.
So, what’s wrong with the current code, and why would we need to change it?

Glad you asked.

Because if you have a bank account with a bank in Australia, if affects you.
If you have a credit card, car loan, home loan, overdraft with a bank in Australia, if affects you.
If you are a small business in Australia, it affects you.

It goes a little something like this:

The 1980’s – Systematic de-regulation of the Australian Banking industry. Recession.

1991 – A report, known as the Martin Report, was submitted to Parliament. This report was an investigation into the behaviour of banks, specifically, establishing a formal system of self-regulation, based on a government approved set of codes. It further raised the issue of the high-costs associated when there was a legal dispute between a customer and a bank, as customers were forced to fight them in the courts. Banks, as we have all seen, have an amazing amount of money, and legal expertise at their fingers. Individuals, small businesses, including farmers, do not. The playing field here was more like a black run in the ski-fields of Switzerland, than the level cricket pitch it is meant to be.

Thus, one of the recommendations laid down in the Martin Report, was to correct this, and allow any and all complaints to go through an independent body where a fair investigation would be conducted and decisions could be made without forcing people to go through the costly legal system.

However, instead of the Government taking this on board, and making it mandatory, the banks turned around and said “ Hey – fair enough, but we’ve got this. You don’t need to oversee it. We’ll make sure this happens”.

And so they did. They came up with a list of behaviours to adhere to, with hardly any of these codes aligning with the recommendations of the Martin Report, and they called it the “Banking Code of Practise (1993)” It took 2 years for it to be written, and another 3 years for the code to be adopted in 1998 and even then, it was a voluntary code, which APRA didn’t have to monitor (only have to regulate mandatory codes).

To date, 16 banks have signed up to it, each of them adopting only the parts of the code they wished to.

These early terms were very simple.
a) The banks would adhere to the terms within the code and
b) ANY and ALL complaints would be investigated.

In May 2000, The Australian Banking Association (ABA) appointed Richard Viney, to conduct a review of the code with industry, government and consumer advocacy groups. This happened at the same time the Minister of Financial Service and Regulation, Joe Hockey, was pushing for an increased level of “self-regulation” to occur within the Financial Industry.

The updated recommendations submitted were that small businesses would now be protected under the code, a Principle of Fairness charter would be added (requiring banks to deal “fair and reasonably towards [you] in a consistent and ethical manner”), and that a new, separate and independent Monitoring Committee should be established to investigate any breaches of the code. This group, created in 2004, was/is known as the “Code Compliance Monitoring Committee”, or CCMC, and was/is selected by, appointed by and funded by the very banks themselves.

This however, prompted the banks to reconsider the terms and wording of the entire Code, and in 2003, Gail Kelly (then STG CEO) and John McFarlane (ANZ CEO) presented the updated “Banking Code of Banking Practise (2003)”. The loopholes snuck into this new code of 2003, were such, that no longer would the CCMC be available to investigate any and all complaints, but that they were restricted to levels unimaginable.

This is because, shortly after the terms of the Code were changed, a secondary contract was put in place, by a group known as the Code Compliance Monitoring Committee Association, or CCMCA.

And the people within the CCMCA are who? Well, no-one knows for sure, because it is an “undisclosed” body, however it has been said to be a cartel, containing only Bank CEO’s. This contract, or “Constitution” was placed over the behaviour and operational activity of the Compliance Monitors.

The systematic gutting on the rules surrounding the terms of investigation have been so successful for the banks, that since 2003, approximately 2.5 million complaints have been lodged, with about 250 actually being investigated by the CCMC to have breached the code.

To give you an example, 2.5 million complaints to 250 investigations looks like this.
( You might need a magnifying glass..)


Did the banks know what they were doing when they changed the Code wording, inserted their own terms upon their funded and appointed “independent” monitoring committee to monitor the very people, who were telling them what they could monitor in the first place?

This goes further than the often cited phrase of “Police investigating Police.” This is more like a Police officer charged with a crime investigating himself, based upon his own decision as to what he’s allowed to investigate, and what constitutes as “evidence”!

The bill being put forward will end the CCMC’s reign as we know it, requiring all code breach complaints to be investigated by APRA, a government body, already set up to regulate the banking sector.

It’s not perfect, but it’s a damn sight better than having only 3 people nationwide (who are appointed by the Banks), responsible for the investigation of all consumer bank complaints. It would not only penalise the banks, both financially and legislatively, and allow APRA to name and shame, but it would provide a level of transparency not seen before in the Australian Banking System.

When Andrew Wilkie announced his bill in August this year, it took only milliseconds for the ABA to reject his suggestions that the current Banking Code of Practise and the CCMC were “toothless tigers”, and that the Banks believe the current format was fair and equitable.

The ABA also suggested that “additional layers of regulation..make it more risky and expensive to lend to small business.”

More expensive? More risky? Perhaps, but “expensive and risky” has been in the lap of the consumer for far too long due to the lack of independence and the forcing of complainants having to go through the legal system, against the banks’ army of lawyers, to get any sort of justice.

The cash rate of the Reserve Bank has been slashed constantly over the past year, allowing the borrowing costs of banks to actually go down, especially when the full rate cut is failed to be passed on. By not passing on the most recent rate cut in October 2012, the banks are making an additional $6.2million per day. This is at a time where record profits have reached $24billion between the big four in 2010-2011.

More expensive? I believe they can afford it.

You could say that the extra $6.2million per day that they are making off us, is currently being spent on the army of lawyers who are needed to fight struggling small businesses, farmers and individuals in the courts. And of course, on a constant barrage of wonderful, if not misleading and deceptive, PR and marketing initiatives.

The current state of affairs deserves no less than a Royal Commission into the corrupt, misleading and deceptive behaviour and intrusion of the banks CEO’s into a supposed Independent complaints procedure, designed to protect the majority of Australian citizens.

I am therefore asking everyone associated with Occupy around Australia, the advocacy groups, the consumer protection groups, to contact their local MP/Media outlet, to give this bill oxygen and media coverage, so that the banks can finally be held accountable for their ongoing mistreatment of the Australian public.

Katie Sheppard
Citizen journalist.
OccupySydney participant
Ph: 0416 088 981

Senate enquiry S90 – Competition in Banking – Dec 2010–eventually