ASIC has been taken to task for its failure to bring the big four banks into line after it was revealed they were splurging on consultants rather than remediating customers.
Senator Deborah O’Neill has grilled ASIC after it was revealed the big four banks were spending large sums on consultants from Deloitte, EY and PwC to manage their remediation programs rather than risk overcompensating customers, saying “it doesn’t seem to me that the banks have figured out what commissioner Hayne was trying to teach them”.
“You’ve spent months arguing with them and they are still not compliant with returning money to the people they’ve ripped off,” Ms O’Neill told ASIC chair James Shipton before the Senate committee on corporations. “They’re giving the money instead to the auditing companies to manage the slowness of the process. It’s just plain wrong.”
Mr Shipton said that ASIC was continuing to have “very robust and forthright conversations” on the acceleration of the remediation programs and “unnecessarily relying on external consultants”.
“We are continuing to engage with the large financial institutions on remediation,” Mr Shipton said. “We continue to work with them to accelerate remediation, particularly in this time, because every dollar back to where it should be is what we’re aiming for.
But Ms O’Neill questioned whether more could be done to bring the banks into line.
“It concerns me greatly that we’ve been having this conversation over a couple of years,” Ms O’Neill said. “People are particularly pressed when we’re in our first recession in 30 years in the middle of a pandemic. If the banks cannot respond, is there a deadline and can you act further to admonish them?”
Mr Shipton said that ASIC was looking forward to a new directions power that would be useful in the process but that they were using “every tool that was available” and were consulting on broadening their remediation guidance to help banks speed up the process.
A total of $828 million has been returned as part of 89 remediation programs, and a further $2.99 billion is expected to be returned to over 2 million consumers.
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