ME Bank and ISA in Parliamentary Committee crosshairs
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.
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
