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First Royal Commission Hearing into Financial Services Industry

Commissioner Kenneth Hayne QC and senior counsel Rowena Orr gave opening statements today at the first public hearings in Melbourne into misconduct in the banking, superannuation and financial services industry. The Banking Royal Commission has been asked to investigate Australia’s $430 billion dollar unregulated commercial finance industry as part of the Commission’s inquiry.

Financial literacy author and advocate Shane Reynolds attended todays hearing following his submission to the Royal Commission into misconduct in the banking, superannuation and financial services industry which has taken aim at “intermediaries” and “non-bank lenders”.

In the first Royal Commission submission to be released to the public by a non-bank lender Shane Reynolds, bestselling financial literacy author said that “Predatory lending is on the rise as a result of a systemic failure of the lending industry”.

 

The submission also takes aim at the unregulated sector of non-bank finance and the insolvency profession, particularly receiver- appointments and calls for greater protection for borrowers.

Mr. Reynolds went on to say “There remains a conflict between the receiver and lender while the insolvency industry is made up of almost 650 liquidators and receivers registered in Australia the tier one firms such as BDO, Korda Mentha, PPB and FTI Consulting employ about half the amount, one could see that a monopoly has been adopted. Of great concern is the continued selling of assets by receivers for below market value”.

385 submissions have been received from members of the public, 49 per cent of those relating to banking, 18 per cent to superannuation, 6 per cent to general insurance, and 6 per cent to life insurance and total permanent disability insurance.

Eighty-four per cent of submissions related to misconduct or conduct that falls below community standards, 40 per cent related to culture and governance, and 35 per cent related to the effectiveness of redress for consumers.

The commissioner highlighted that major financial institutions failed to provide required information under the imposed deadline of 2nd Feb 2018 and that further attention would be given to such matters.

The commissioner warned against gagging complaints and discussed the issue of non-disclosure provisions in settlements. Commissioner Hayne did not explicitly waive the confidentiality requirements on consumers but said legal action by a financial institution against someone called as a witness who had a settlement agreement would be in breach of the law.

Shane Reynolds is the author of the book, ‘Get a Second Opinion before You Sign’, the book attempts to “lift the curtain” on under-the-table practices occurring in an unregulated industry with no consumer protection. 100% of the proceeds of the book are donated to Aussie Helper’s charity to assist Australian Farmers.

Commissioner Hayne is to deliver an interim report on September 30 and a final report on February 1.

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