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Two years after the banking royal commission exposed rampant corruption in Australia’s financial industry, many consumer advocates say not enough has been done to repair the issues exposed by the commission’s report.
The revelations brought to light by the probe ended the careers of top execs at AMP, Westpac and National Australia Bank, and spurred legal action against Commonwealth Bank, Allianz and other financial giants.
But two years on, only a third of Commissioner Kenneth Hayne’s 76 recommendations have become law, according to a report by ABC News. Some recommendations have been abandoned entirely, and Hayne’s top recommendation – to leave the existing responsible lending laws unchanged – is set to be thrown out.
The year-long royal commission began in early 2018, prompted by years of high-profile scandals involving Australia’s banking giants. The commission exposed criminal behaviour and dishonest practices costing customers billions of dollars.
Some of the commission’s most sweeping recommendations were scheduled to become law at the end of 2020, according to ABC News. But two separate tranches of laws were delayed by six months, with the need for the industry to recover from the impact of COVID-19 cited as the reason for the delay in May. However, it later came to light that the banking industry had made a concerted lobbying effort to delay the implementation of the recommendation.
Cat Newton, senior policy officer at the Consumer Action Law Centre, felt the delays were a slap in the face to those harmed by the banks’ actions.
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“What we don’t want to see is another two years go by and all of the lessons of the royal commission are lost,” Newton told ABC News. “Frankly, it’s an insult to banking victims across Australia and for all the people that gave evidence to the royal commission that two years on we’re still waiting for these reforms to be implemented.”
The commission revealed practices such as selling insurance policies to people who did not understand them and giving a gambling addict credit card limit increases even after he begged the bank to stop offering him more debt.
But an analysis by the Consumer Action Law Centre (CALC) suggests that only 27 of the commission’s 76 recommendations have been implemented. Of those implemented, two recommendations involved doing nothing – for example, keeping existing regulatory agencies in place.
“The majority of the 76 recommendations are still yet to be implemented and put into effect for the benefit of consumers,” Josh Mennen, principal lawyer for the Australian Lawyers Alliance, told ABC News. “And that’s a really disappointing lack of progress after two years. And in fact some of those recommendations have either been abandoned or defied.”
CALC’s analysis found there were 45 recommendations awaiting legislation that had been delayed by the COVID-19 pandemic. However, the Australian Banking Association argues that 44 of the recommendations are complete.
The disagreement between the analysis boils down to how fully some of the recommendations have been implemented, according to ABC News. In essence, a recommendation that has been diluted or changed from what Hayne directed is counted as a fail by CALC, but a pass by the ABA.
Among the recommendations that have not been implemented was a ban on commissions for mortgage brokers, as well as a recommendation that brokers be subject to financial planning laws.