The Government’s extension of the Australian Securities and Investments Commission’s powers to fine banks that are imposing unfair or unscrupulous mortgage exit fees is a step in the right direction, but further regulation around the behaviour of banks is needed.

Finance Sector Union National Secretary Leon Carter said that bank gouging  on fees to boost their profits come from many other areas of banking and must also be addressed.

“In particular the exorbitant interest rates that are charged on mortgages and lines of credit ought to be regulated so that they accurately reflect the RBA’s decisions,” said Mr Carter

“Furthermore a focus on irresponsible lending practices is required to ensure that credit products and loans aren’t being pushed on to the customers that can least afford it.

“The insidious practice of linking workers’  performance in sales targets to their take home pay must stop for the health of our financial sector  both for workers who are under extreme levels of stress and for customers who get overburdened by debt.

The FSU’s Better Banking Charter outlines core areas of reform that both customers and workers endorse:

• Commitment from Government and banks to stop offshoring jobs and invest in developing skills in the Australian financial sector (90% of the public support and 93% of workers support)
• Government regulation to prohibit or significantly limit the extent to which performance can be measured by sales targets linked to selling debt products in the finance sector. (79% of public support and 90% of workers support)
• Government regulation to require banks to reflect interest rate movements set by the Reserve Bank (80% public support and 79% of workers support)
• Government regulation to prohibit the bonus culture that rewards risky short-term behaviour by executives in the finance sector (90% of public support and 89% of workers support)
• Regulatory requirement for banks to demonstrate a direct link between their fees and charges and customer service provision (82% support by public and workers)

“The community, our financial sector and our economy would be much better off with the implementation of these reforms to create better banking for everyone,” said Mr Carter.
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Spokesperson: Leon Carter, National Secretary, 0409 946 597
Media: Anaya Latter 0432 121 636