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Tag: National Australia Bank

9 years of corruption in the Australian Banking Industry.

EXECUTIVE SUMMARY OF A CORRUPT 2004 BANKING CODE

Information sourced from bankinfoline.com

In 2010, a very detailed and thorough document was submitted to and accepted by the Australian Senate on Banking Reform. It’s known as “The Australian Bankers Problematic Code” paper.

This letter attempts to highlight the most important sections of it, to give a high-level overview of the document, so it can be exposed to the public and not kept hidden under layers of banking misconduct and media blackouts.

The Problematic Code paper follows the 18 year evolution of banks being forced (by threat of government regulation after Senate reports in 1991) to document rules, which governed their behaviour towards customers. This document is known as the “Banking Code of Practise” and the banks have been contractually bound to them since 1996.  In a publication on 1 November 1993, senior bankers, Commonwealth Bank’s David Murray and NAB’s Don Argus, were said to have agreed to be contractually bound by the code if government allowed banks to manage it.

This code is monitored by 3 people, the “Code Compliance Monitoring Committee” (CCMC), and their job is to investigate and make a determination on “Any and All complaints” made by the public against the code subscribing banks behaviour. (cl. 35.7)

In 2003, unsatisfied with the original practices, ANZ’s John McFarlane and St George Bank (now Westpac’s) Gail Kelly, and senior Australian Bankers Association officers redrafted the code introducing loopholes in the previously high-principled process. With the introduction of loopholes 16 banks agreed with the changed practices and became code signatories.

A year later, in 2004, banks agreed it wasn’t enough and sought to benefit themselves even further.

A new layer was secretly added so that the CCMC was no longer at liberty to investigate “Any and All complaints..”. This is because the 16 signatories formed a new group known as “The Code Compliance Monitoring Committee’s Association” (CCMCA) and they wrote their own rules as to what banks had to investigate. They set these new rules out in a document they called “the Constitution”. The Constitutions terms were so restrictive towards the job of the CCMC, that to date the independent Code Compliance Monitoring Committee have only investigated 250 complaints alleging the banks have breached the code.

The “Constitution” was never published, its restrictions were never made public and the CCMCA members never announced as a public group. The directors of the 16 banks and their CEO’s wrote a new set of rules setting out what this supposedly independent body they appointed called the Code Compliance Monitors were allowed to investigate.

Since 2004, the directors of major banks have told their customers and customer’s lawyers, and the public, that if a customer or small business signs a bank’s contract they will be protected as the code is contractually binding. However the Problematic Code paper sets out how a new set of banking ethics have evolved and the paper names banks, the bank directors and other people who sat benignly allowing banks to introduce corrupt practices that cripple customers.

You might ask how could this happen, was it uncaring legislators or sleepy regulators? It’s probably both.

In 2008, the previous Code Compliance Monitors, acting as whistleblowers, exposed the scam prior to resigning. The Compliance Monitors were appointed by and paid for by the signatories banks to investigate any allegation, by any person a bank breached the code. The Constitution, however, meant banks didn’t have to do that. By not requiring banks to investigate complaints, customers were forced to take banks to court if they breached a contract.

And that, as everyone knows, is costly, lengthy and a futile battle.

Examples as to how this can affect individuals, are evident in the Priestly case. Had the bank provided a fair and independent complaints procedure, they probably would not have spent the last six years battling it out with their bank in courtrooms across the state, and ultimately, losing their house and farm in January, this year.

The Priestley complaints

On 26 January 2013, the Priestley’s, having read “The Australian Bankers Problematic Code” paper set out their experiences and concerns in complaints sent to Mr Michael Chaney AO and NAB Directors. The bank breached its contract by failing to investigate the complaints which are serious.

In 2013, a principled banker would investigate the following complaints and respond, if the NAB had nothing to hide. However, to date there has been no official response so, instead, we will follow the NAB investigation as it unfolds, keeping in mind the Compliance Monitors had a contractual duty to name and shame bankers breaching the code.

Following years of failed attempts to have their bank complaints investigated, on 26 January 2013, the Priestley’s referred the following complaints to the NAB Directors, alleging:

 

1       In 2012, National Australia Bank directors intentionally or recklessly allowed its CEO, Mr Cameron Clyne, to breach the bank-customer contract when the NAB failed to investigate all the Priestley complaints, copies of which were sent directly to him.

2        Since 20 February 2004, the NAB changed terms of its contract, which meant Farmer-NAB contracts and small business-NAB contacts were potentially non-contracts and not binding.  

3        The NAB, and other signatory bank officers, instructed their managers and lawyers to keep the “Constitution” and thus changed bank-customer contracts from the courts for a decade as the courts might not hear their cases.

4        The NAB, and other signatory bank officers, and bank representatives, asked customers to sign contracts when they knew or should have known the contractual rights were changed causing customers financial disadvantage.

5        The NAB’s and other signatory bank CEO’s were members of the Code Compliance Monitoring Committee’s Association that created and relied on the constitution to conceal a countless number of contract breaches.

6        According to Mr Andrew Wilkie’s 2012 press release, there have been 2.5 million bank complaints since 2004, yet only 250 investigations, which was when the changed terms in the started to truly strip away bank customers rights.

7        For a decade, Code Compliance Monitors were dishonest and their actions corrupt allowing people to believe they could investigate and make a determination on any allegation a bank breached the code when they had no such powers.

8        Since 2004, NAB and ABA’s conduct was dishonest and their actions corrupt when they published untruthful statements intended the make the Australian public believe code signatory banks would comply with the code and investigate all code breaches and complaints.

9        In 2012, the NAB instructed lawyers to attend court and keep from His Hon. Justice Peter Garling the truth about the Problematic Code and by their silence they allowed the court to still believe the code was contractually binding.

NAB’s internal dispute resolution process

Mr Michael Chaney AO and Directors of NAB told all their customers that the bank has an internal process for handling disputes (Cl. 35.1).

●     It will be free of charge (Cl. 35.1(b));

●     We will adhere with timeframes specified in the contract (Cl. 35.1(c);

●     We will notify the name and contact number of the NAB person investigating your dispute (Cl. 35.2); and

●     Within 21 days of becoming aware of the dispute we will inform you of the outcome (Cl. 35.3).

What Mr Michael Chaney AO and NAB Directors also said. The bank:

●     Has a dispute resolution process available for all complaints unless resolved to your satisfaction (Cl. 35.7);

●     Will provide customers with the above information in writing (Cl. 35.8); 

●     Will provide information to customers in plain language (Cl. 2.1(d)); and

●     Will act fairly and reasonably towards customers in consistent and ethical manner (Cl. 2.2).

Editors note

The last four dot-points relate to all complaints, which signatories to the Code of Banking Practice and NAB contractually agreed to provide customers since 2004. NAB might believe that customers can agitate complaints in the courts and have their say, however only the bank has the benefit of having unlimited funds to fight in the courts.

Nobody could believe customers could lodge 2.5 million complaints since the “Constitution” was introduced and therefore, depending on NAB findings and with new information to hand, individual and small business customers who have lodged complaints since 2004 can ask them to be re-heard. Especially if the banks had been hiding behind these secret documents, and which may have influenced the judgement in the first place.

This time by a truly independent, non-bank appointed /funded committee giving customers who suffered adverse court judgements since 2004, a chance to finally have their day out of court and be heard in full.

A fair go. It’s not much to ask for really.

 
*************

Occupy Sydney Day 365: The Priestley’s versus NAB Bank

This is the first time in 2.5 years that the Priestly’s have stood up in public to speak about their fight against the NAB – they are very brave to do this. My hearts goes out to them

** Update ** Communication received today from The Priestly’s.

“Michael Chaney, NAB Chairman, should not be allowing possession to go ahead when the most recent letters have put them on notice that we know they have engaged in misleading and deceptive conduct.

( refer to post : https://thoughtsonthebus.wordpress.com/2013/01/17/the-farmers-vs-the-banks-update/)

This is by having a secret constitution that meant they would never investigate complaints.  By that time, you are in court, and you can’t win because they have set you up to default, so your too broke to have your complaints heard in court.

The Code is meant to be a free service to protect customers. Lawyers and Courts are not free.

Michael Chaney should instruct the NAB lawyers  now to stop all possession until appeal and these allegations are investigated and then he can prove (if he can) that the directors and CEO have not cheated us.”

The Farmers vs the Banks – Update

First of all, this linked article by Professor Evan Jones is amazing, detailed and extremely worthwhile reading.

Secondly -The Farmers have only a few days left until the Sheriff comes and seizes their property, yet still they fight! Amazing family, I’m so very proud to know them.

These attached letters show exactly why they are continuing to fight, and how the Bank’s and their  fraudulent and misleading behaviour towards treating you in a “fair and reasonable manner” is just a load of ..well, crap, to put it bluntly.

Link to – Priestly Letter to Cameron Clyne – NAB CEO – 6th Jan 2013

(The information sent to NAB by the Priestley’s was obtained from the Council of Small Business submission no. 90 (Attachment 1) published by the Parliament in 2011.) The link is here:

http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=economics_ctte/completed_inquiries/2010-13/banking_comp_2010/submissions.htm

Link to – Priestley to NAB Chairman Chaney 14 Jan 2013
ClementRodNABGRABAFR
Please share around, download the letters and the link, and help me spread the word. ANZ supporting mining is a big deal, but even bigger, is the fact that these banks KNOW if you complain, they don’t have to worry as they control the complaints process.

http://www.independentaustralia.net/2013/business/finance-2/business-as-usual-at-the-nab-and-grab/

 

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..)

Image

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

Sources:
www.bankinfoline.com
Senate enquiry S90 – Competition in Banking – Dec 2010
www.andrewwilkie.org
http://www.news.com.au/opinion/jessica-irvine-when-winning-banks-take-all
http://www.smh.com.au/business/banks-to-pass-on-rate-cut–eventually