LEICHHARDT MP Warren Entsch has welcomed the much-anticipated report into lending practices by the major banks which was released today by the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell AO.
The report makes 15 recommendations, four of which are for Government and the remaining 11 directed at the banking industry itself.
“Call it a tribunal or what you like, the body that is established has to enable people access at no cost to themselves and they have to be able to deal with past cases, not just future, and get redress so that banks change their actions,” Mr Entsch said.
The MP said he was pleased to see the recommendations about binding determinations that need to be enforced, which he has long advocated for, and provision for compensation. However he believes there still needed to be a stronger penalty regime.
“I’m drawn to the American system where the penalty to financial institutions is three times the total damages, whereby the penalty also helps to fund the Tribunal’s operating costs,” Mr Entsch said.
“There is no better way to put pressure on financial institutions than by hitting them in their back pocket; it’s the most effective way to ensure they focus on reform and do the right thing by the consumer.
“Also, while we’re focusing on the small disputes we must also remember the bigger end of the scale. There are people in Cairns who have been impacted by inappropriate bank practices whose losses have been well in excess of $5 million.”
There is also good news for farmers in struggling rural communities who have long faced inconsistent approaches throughout Australia. The report seeks to provide a nationally consistent approach to Farm Debt Mediation.
“There is a lot of public sympathy for the plight of the farmers who have been done over by the banks so I’m very supportive of any measures to help them get redress.”
Mr Entsch congratulated Ms Carnell’s efforts and said he would continue to work closely with her.
To view the Carnell Report in its entirety visit: http://www.asbfeo.gov.au/sites/default/files/030217-ASBFEO_Report.pdf