ME Bank and the superannuation funds which are its major shareholders are about to come under intense scrutiny by the House of Representatives Standing Committee on Economics.
The chair of the committee, Tim Wilson has called an urgent public hearing of the committee based in large part on ME Bank’s recent conduct around unilaterally changing client’s mortgage redraw arrangements but, at the same time, trying to bring in the superannuation funds.
According to Wilson, “The conduct of ME Bank has raised urgent questions about the security and flexibility of the savings of Australians with their mortgage products and necessitates scrutiny”.
He also wants to shine a spotlight on the conduct of Industry Super Australia (ISA), a number of superannuation members of which are also shareholders in ME Bank.
“Australians trust superannuation funds with significant savings, they hold a fair expectation that funds will provide accurate information and will act promptly if they are eligible for early withdrawal. The conduct of Industry Super Australia in publishing dubious calculations about the impacts of early withdrawal will be examined, as will processes to stop fraud,” Wilson said.
“Members' equity should be paramount, and concerns about liquidity also need to be answered. It was only in November last year that the sector dismissed this committee’s concerns about liquidity prompted by substantial investments by funds in illiquid assets,” he claimed.
“As the superannuation system is a significant mechanism enabling Australians to support themselves in retirement, it is crucial that the superannuation sector is operating effectively, fairly and for the benefit of fund members.”
Wilson said the COVID-19 pandemic had also raised a number of issues, including how banks and the superannuation sector are supporting affected customers and members.
Comments
I wonder which feather they'll be slapped with?
While they are at it, perhaps the House Standing Committee could look into Industry Funds 'truth in labeling', sponsorship deals, payments to Board Members, member funds being used for Union activities and 'Best Interest Duties' for their in-house 'advisers'......I won't hold my breath.
Well CFP, maybe you could ask why you're beloved FPA won't say anything if you're so concerned? I suspect you are like most FPA members, their memberships fees are paid by their employer , as a result the FPA don't want to bite the hand than feeds them. I think you'll find your beloved FPA will say nothing to see here, move along & let's just keep blaming planners, certainly no product issues here.
Taxpayers of all political persuasions should be angry that this backbencher continues to use this committee and valuable public expenditure in this way as his personal hobbyhorse to pursue his ideological agenda. While our economy burns this guy fiddles
I am not angry at all. I think he is doing his job. People who dismiss scrutiny are trying to hide something. What are you trying to hide Really?
Tim Wilson is just looking to get more business into his relatives' and IPA mates' funds.
Perhaps. Or he's trying to ensure that the largest cohort of superannuation monies, that is the unadvised sector, are looked after and the funds are doing their job properly. ME Bank is in for a serious reaming though - great article in today's AFR about it's valuation going up each year despite profits falling. Something doesn't stack up there!
Hedware, did you read the article in SMH 11-5 quoting good old Bernie Fraser
"Members Equity Bank was starting from the other side. It was to provide banking services to Industry Super Fund members"
Seems the Bank was set with the idea of providing cheaper services to member - and any profits could then be returned to the Industry Funds and all are happy little members.
In reality it appears that 1) ME has no paid any dividends to it's shareholders 2) "the bank gets capital injections from the super funds that own it from time to time" and I also believe the value of the shareholding has continually increased in value for the Industry Fund members that own it.
If these three facts are true, perhaps the Bank should be correctly seem as Member Services, and all these capital injections should then be reflected in the relevant Industry Super Funds PDS as a fee. This would mean that the value within the fund is basically meaningless but as it stands, it appears to be a member service without disclosing of fees and a write-down of the asset should follow.
Don't know anything about this ME Bank and so this is all news to me. Pretty discreditable act by that bank to arbitrarily withdraw funds from customers without notification. Its board seems to have some heavies from the private banking sector as well as union officials.
Yes, like most Unions, the Union Funds & ME are simply a law under themselves. What a disgrace.
Tim Wilson again puts ideology over good policy.
There is no suggestion Industry funds have been unable to pay out under the early release scheme.
Ronan, Industry Funds themselves suggested they may have issues meeting payments mate.
Ronan, this article is well worth your time to read - otherwise it looks like your statement verse good old reliable Bernie Fraser.
https://www.smh.com.au/business/banking-and-finance/the-bank-for-me-or-a...
I would support this because the lack of transparency needs to be addressed. Why is it that whenever these matters come out they strike a chord with Advisers and yet the FPA/AFA are silent? However our current industry bodies are just looking at the Gravy train of potential advisers these call centres will provide in the future. Why would anyone want to be a member of a body that places the financial needs of their own association ahead of their members???? Oh wait Industry Super Funds of Australia are now sending them an excel list of members names with a cheque attached also.
If you're concerned about the cost, we could use Hesta's approach and say it would only cost taxpayers $1.50 a week to run.
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