- An executive from the ANZ rejected a suggestion the bank’s actions had fallen below community expectations.
- The case revolves around a Victorian family left without a home or a way to earn a living.
- However, the executive did say the bank should have done the right thing by the family, finding a way for them to have a home.
The concept of doing the right thing by a customer as opposed to how the community might expect a bank to act became a key question in the financial services royal commission today.
The issue was canvassed as part of questioning about the case of a fourth generation farming family in Western Victoria, the Cheesmans, who were told by the bank to sell up in six weeks, leaving them without a home or a way to earn a living.
The loans came to the ANZ when the bank bought the rural loan business from Landmark.
At that time the Cheesmans, made up of Arthur and Rhonda and their son and daughter in law, were already under financial strain, with about 40% of their farm income being used for interest payments on the loans.
After the sale of property, bringing in $2.7 million, the Cheesmans still owed the bank $630,000. They sold a tractor which reduced this further to $550,000.
They asked the bank to forgive the outstanding amount. The bank refused.
The family continued to sell off farm machinery, reducing the debt by December 2012 to $275,756.40. A member of the Chessmans’ extended family offered a loan of $250,000. This was offered as final payment to the bank. The ANZ refused but said it would accept $265,000, which the Cheesmans then paid.
Arthur and Rhonda lost their home but their son and daughter in law kept theirs.
In the witness chair today was Benjamin Steinberg, the ANZ Bank’s head of lending services, who was with a task force looking at high risk files from a group of loans acquired from Landmark Financial Services in 2009.
Steinberg today rejected suggestions that the bank had fallen below community standards and expectations in its dealings with the Cheesman family.
He said some in the community would believe a bank should have the right to recover its debts.
Commissioner Kenneth Hayne said he was struggling to understand why Steinberg didn’t think the bank had fallen below community standards.
He said: “What was the right thing to do at the time of these events?”
Steinberg said the bank should have come up with a way for the Cheesmans to keep some form of home ownership and a way to earn a living.
Rowena Orr, senior counsel assisting the commission, asked Steinberg: “I just want to be clear … what your position is now about events I have asked you about this morning involved conduct by ANZ that fell below community standards and expectations? I want to know what your position is now.”
Steinberg replied: “What we did here — and I know its sounds harsh and you can tell I am finding it hard to say this — when you analyse it clinically, what we said in this case, we did what we said we were going to do.”
Orr: “Can I ask you to look this in a different lens which is the way you did what you said you were going to do. We have just seen .. the way the the ANZ handled the process of asset realisation with the Cheesmans. Did the way ANZ handle that process fall below community standards and expectations?”
Steinberg: “I am recalling conversations with the Cheesmans where they acknowledge that they were going to sell all their assets to repay their debt. I don’t mean to justify the way that it was done … but you can clearly see I am not quite getting to the point where I fell it’s breached community standards.”
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