A bank victims tribunal should be established by next July and badly-behaved bank executives and financial planners should have their reprimands made public, an inquiry into the big four has recommended.
The corporate regulator should also publish an annual report on the wealth management industry detailing misconduct, who was involved and what repercussions occurred.
A report by the House of Representatives Standing Committee on Economics was tabled in federal Parliament on Thursday morning.
“While Australia’s major banks have remained financially strong, they have let Australians down too frequently in too many ways,” Liberal MP and committee chairman David Coleman said.
In all, the committee has made 10 recommendations, including reaffirming Prime Minister Malcolm Turnbull’s intent to establish a tribunal.
Along with a beefed up reporting regime, the committee recommends measures to deal with “systemic” competition failures and improve “flawed” internal dispute resolution procedures.
Banks should be forced to give customers access to their data by July 2018.
A notable absence is the idea of tracker mortgages, which was the focus of much debate during public hearings.
Labor said the report was a stunt to avoid a royal commission.
Mr Coleman said that during the course of the inquiry it became clear “senior executives are not suffering the consequences of poor consumer treatment”.
“We need to shine a bright and public light on senior executives breach the trust of consumers,” Mr Coleman said.
“Simply put, when customers are continually let down, bank executives should be fired,” he said. “This is not occurring at present.”
The committee has recommended banks be forced to name senior executives responsible for any breaches financial services licensing laws, as well as stating publicly repercussions for those executives.
“If a senior executive is not terminated following a breach of a license condition, the bank should be required to justify this decision,” Mr Coleman said.
The Australian Securities and Investments Commission should require banks to publicly report on any significant breaches of their licence obligations within five business days of reporting the incident to ASIC, the committee has recommended.
The wealth management industry should also be more closely scrutinised by ASIC. An annual public report on the wealth management industry would detail misconduct and the names, companies and advisers involved.
“The report should also contain details of the consequences for those companies and individuals,” Mr Coleman said.
“At present, these matters are not made public, and public scrutiny is likely to lead to better behaviour by banks.”
Mr Turnbull has already flagged the establishment of a tribunal.
Mr Coleman said it should be a “one-stop shop that allows individuals and small businesses to gain recompense when they are wronged by a bank”.
“The current system does not provide consumers with a simple means of address, often leading to individuals having to pursue banks through the courts,” Mr Coleman said. “This must change.”
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