03-Jun-2020 • Corporate
Chairman, thank you for the opportunity to clarify for the Committee, some of my previous answers in regards ME Bank’s dealings with ASIC in relation to the Bank’s recent actions in respect of certain customers’ home loan redraw facilities.
Pursuant to that, today I have with me Mr Ken Barnes, Chief Risk Officer of ME Bank, who is the responsible executive for our dealings and relationship with ASIC and APRA.
I have prepared a very brief opening statement that sets out the chronology of our interactions with ASIC and APRA, that with your permission I would like to read.
I refer to the transcript of the evidence I gave to the Committee at the public hearing on 14th May 2020.
On pages 30 to 31 of the Transcript, I answered questions from Mr Jason Falinski MP specifically regarding when ME Bank informed ASIC about its decision to reduce customer’s redraw limits. As I confirmed during the hearing, that decision was made by ME Bank on 26th March 2020. ME Bank informed ASIC of this decision on 16th April.
Some questions have subsequently been raised about ME Bank’s interactions with ASIC and APRA prior to March 2020. Given those questions, I want to provide additional information regarding the communications ME Bank had with ASIC regarding the redraw issue. I also noted that in my response to the Committee on the 26th May some of my answers of 14th May 2020 would be expanded on in response to the follow up questions received by the Bank on 15th May 2020 and 21st May 2020.
On 10th December 2019, ME Bank notified ASIC of the Redraw Issue and informed ASIC it was analysing the issue further and considering actions it would take to address the issue. This issue was also discussed during ME Bank’s regular engagement meeting with ASIC on 18th December 2019.
On 30th March 2020, ASIC requested an update in respect of the Redraw Issue. On 16th April 2020, ME Bank provided an update to ASIC, at which time it informed ASIC of its decision, made on 26th March, to reduce the redraw limits of certain of its customers.
On 21st April 2020, ASIC sought further information from ME Bank about this update, which ME Bank provided to ASIC on 23rd April 2020.
Since 3rd May 2020, ME Bank has been in regular contact with ASIC regarding the Redraw Issue, including the bank’s decision to allow affected customers to request reinstatement of their redraw limit.
In relation to ME Bank’s communications with APRA:
- On 16th December 2019, ME Bank notified APRA of the Redraw Issue. This information was shared as part of ME Bank’s ongoing engagement with APRA.
- On 30th April 2020, ME Bank provided an update to APRA regarding the Redraw Issue and informed APRA of its decision to reduce the redraw limits of certain of its customers.
- ME Bank has since provided updates to APRA regarding the redraw issue, including the bank’s decision to allow affected customers to request reinstatement of their redraw limits.
In concluding, let me say that it is important from ME Bank’s perspective to have a constructive and effective relationship with the regulators, based on openness, co-operation and transparency.
Ken and I are happy to take your questions. Thank you.