The big banks can’t be trusted with a controversial winding back of responsible lending obligations being pushed by the government.

That’s the warning from University of Sydney professor David Kinley, who spent months assessing the human rights performance of Australia’s largest financial services companies, including the big banks.

And Professor Kinley said it was a fail grade across the board.

In a scathing report published on Monday, Professor Kinley found the major banks had failed their customers and society more broadly when it came to human rights, despite the Banking Royal Commission calling for a cultural overhaul.

Researchers found too few staff were dealing with economic security, discrimination and workplace safety issues, while the banks also hadn’t adequately identified human rights as one of their financial risks.

Crucially, the report said banks were failing to deliver positive human rights outcomes – from failing to resolve customer complaints, to falling short on supporting the Uluru Statement From the Heart in reconciliation plans.

And it wasn’t just the big banks, either.

Afterpay and QBE also scored poorly against Sydney University’s human rights benchmarks, which are detailed here.

Click to enlarge.

Professor Kinley said the findings should act as a wake-up call for the federal government, which is currently trying to pass through the Senate the largest liberalisation in lending laws in a generation.

He told The New Daily the big banks had talked a big game after the royal commission, but rolling back responsible lending would further expose Australians to the banking sector’s scandal-plagued history.

“The banks are not doing as well as they should – governments need to encourage the banks to behave better,” Professor Kinley said.

“Over the past two years [since the royal commission], there have been some indications of improvement in terms of recognising human rights, but we have a long way to go.”

Under existing responsible lending laws, which the government is trying to scrap, banks are required to conduct extensive identity and credit checks to make sure customers are suitable for the loans for which they apply.

Professor Kinley fears the banks will scale back their credit checks if the laws are repealed, which would jeopardise the human rights of customers who qualify for unsuitable loans.

Banks fail the human rights score card

In preparing the report, Professor Kinley scored the banks on their efforts across six categories: Privacy and information; anti-discrimination; economic security; health and safety; voice and participation; and right to remedy (complaining).

On each front, every business included in the scorecard met few if any human rights indicators, with the biggest issue being a lack of board-level accountability and responsibility for the human rights of customers, workers and society.

Professor Kinley said the consequences are laid bare in recent ASIC court proceedings against Commonwealth Bank and Westpac for dodgy behaviour.

He said the banks were filling our news feeds with commitments and favourable announcements, but failing to deliver – which is what matters.

A lack of executive accountability was also a key theme of the banking royal commission findings, which saw banking bosses resign en masse.

“The banks have lots of fine statements, words and sentiment, but they’re lacking this overall direction from their boards,” Professor Kinley said.

“This includes not just regulatory compliance, but that they may end up creating human rights problems by not being careful enough.”

An Australian Banking Association spokesperson said the sector was acting on human rights issues from aged care to modern slavery laws.

“The banking industry takes human rights seriously and acknowledges there are always opportunities to improve,” the spokesperson said in a statement.

Professor Kinley’s findings come after separate analysis found many of the banking royal commission recommendations hadn’t yet been implemented, despite the looming liberalisation of lending laws.

Treasurer Josh Frydenberg has argued that responsible lending laws are holding back the COVID-19 recovery, but experts say no evidence has been presented to prove that and warn the reforms would enable abuse.

The reforms are currently before the Senate and scheduled for further debate after the budget next week, although the government will need to win over the cross bench amid opposition from Labor.