Consumer law and the banking Royal Commission
In a move that should benefit consumers and ensure compliance with Australia’s consumer laws, the Federal Government has announced that the Australian Securities and Investments Commission (“ASIC”) will be tasked with placing staff in major banks at levels ranging from headquarters to local branches. This comes after evidence at the banking Royal Commission of misconduct on the part of the banks. These staff will be funded by fees paid by the banks for banking regulation. It is a step which should be welcomed, provided it is effective in ensuring the banks’ fee gouging and other misconduct ends.
It is intended that the presence of ASIC staff within the banks in a supervisory or auditory role will prevent breaches of regulations and legislation from occurring, and “crack down on anyone doing the wrong thing”. It could reasonably be argued that in addition to these measures, financial penalties would be needed to be maintained to ensure the regulations are enforced.
It is possible that the initiative could in time extend to other sectors of the financial sector, such as the superannuation industry and financial advisors.
At present, it is fair to say Australian consumers have little faith in the banking and financial sector generally to comply with relevant consumer laws.