Financial Services Royal Commissioner Kenneth Hayne has put the banks on notice in his opening address in Melbourne on Monday, saying the inability of some to provide him with timely information was “a matter to which further attention may have to be given”.
Commissioner Hayne, a retired High Court judge, asked the banks and financial institutions to provide by December 2017 details of their misdeeds over 10 years and then requested further detail of the last five years to be delivered by January 13, 2018.
However, some banks had objected to the deadline, saying they could not meet it and demonstrated “an inability to provide five years of information”, Commissioner Hayne said.
The inquiry will examine submissions from both financial institutions detailing their wrongdoing and inability “to meet community expectations”, as well as submissions from members of the public.
It had received 385 submissions so far with 49 per cent focused on banking, 18 per cent on superannuation issues and the rest on financial advice and insurance.
It was called in December in response to public outrage at billions of dollars of financial scandals in recent years, many uncovered through investigative reporting.
It will be working to a tight deadline, having to make an interim report in September and final report by February next year.
“The commission will not have time to publicly examine every example of misconduct,” Commissioner Hayne said.
However, public input will be an important part of the process with the commission “helping identify… what the industry see as misconduct and what the public see as misconduct,” he said.
The commission would examine “what has occurred and why it occurred, what was the response to the misconduct and what follows from those conclusions”, he said.
Banks will be the first target of investigation when hearings start in March, with a focus on “inappropriate” mortgage lending, Counsel Assisting the Commission Rowena Orr said.
Consumers appeared not to have “always enjoyed the right to be treated honestly and fairly” when it came to home lending, with examples of “breaches of the law and not meeting community standards”, she said.
“The terms of reference [of the commission] are broad, and the time to report is short,” Ms Orr said.
A breakdown of submissions received to date show that around one-third relate to the way banks dealt with their customers’ personal financial arrangements like loans and deposits, 17 per cent relate to superannuation and 13 per cent relate to small business dealings by banks.
A further 9 per cent of complaints to the commission related to financial advice.