Class action lawyer welcomes Senate inquiry into banking sector

The lawyer spearheading a class action against Bankwest has welcomed the announcement of a broad-ranging parliamentary inquiry into the banking sector.

Slater & Gordon commercial litigation lawyer Van Moulis, who is working on a class action on behalf of dozens of aggrieved borrowers, says he looks on with “great interest” to see what the Senate investigation uncovers.

“I’m very pleased,” Moulis said.

The inquiry, announced yesterday, will look into:

• the impact of borrowing and lending practices in the banking sector both during and since the global financial crisis;
• the need for further consideration of the state of the broader finance and banking sector;
• the impact of international regulatory changes on the Australian banking sector;
• the impact on relative shares of specific banking markets; and
• the current cost of funds for lending purposes.

The Slater & Gordon case is centred on the idea that Bankwest customers were victimised by “improper” lending and recovery practices in 2008.

Of particular interest is a provision that allowed buyer Commonwealth Bank to “claw back” bad and doubtful debts from vendor HBOS.

A Bankwest spokesperson said today that the bank would cooperate fully with the inquiry if called upon.

The Senate inquiry has been spearheaded by Nationals Senator John Williams, who raised the alarm at reports that banks were pulling loans to small business clients, including farmers, leading to assets being sold at rock-bottom levels.

He said yesterday the inquiry would allow “developers and investors who have complaints about the way they have been treated a chance to have their say.”

“This inquiry will also be able to scrutinise the role of receivers and valuers to see whether they are doing the right thing when valuing and selling properties.”

“I have heard some horror stories about their actions.”

“We need to know if everyone is and has been treated fairly. We need to know the vulnerable are protected.”

“Ultimately we need our banking sector to be strong, but if there are concerns they need to be addressed.”

The Australian Bankers’ Association said it would “provide a submission to the Senate Inquiry and will seek to appear to give evidence.”

“It will be a good opportunity for the ABA to explain why banks’ funding costs have increased relative to the Reserve Bank’s cash rate and why that has meant home loan interest rates have increased.”

“Also we will be talking about why solid, reliable and profitable banks are important for the Australian economy.”