ME Bank, Industry Super face probe over COVID-19 support
ME Bank and Industry Super Australia will face a federal parliamentary committee next week to ensure they are providing their customers the support they need during the coronavirus pandemic.
ME Bank was forced to a reverse a policy that reduced the amount of money its customers could access from their redraw facilities during the crisis.
"The conduct of ME Bank has raised urgent questions about the security and flexibility of the savings of Australians with their mortgage products and necessitates scrutiny," chair of the House of Representatives economics committee Tim Wilson said in a statement on Sunday.
At the same time, he accused Industry Super Australia of publishing "dubious calculations" about the impacts of early withdrawal from superannuation accounts in response to the economic impact from the pandemic.
"Australians trust superannuation funds with significant savings, they hold a fair expectation that funds will provide accurate information and will act promptly if they are eligible for early withdrawal," Mr Wilson said.
The inquiry will also look into fraudulent claims made from super accounts.
The hearing by videoconference on Thursday will form part of the committee's ongoing review of the four major banks and other financial institutions.
ME BANK BACKFLIPS ON MORTGAGE REDRAWS
Industry-super fund owned bank ME has backflipped on a disastrous move to reduce available funds in customers' home loan redraw accounts.
The debacle has been a nightmare for the lender after it left about 20,000 customers without access to some of their own money they had tucked away in mortgage redraw accounts in recent weeks.
In an issued statement released by the bank today ME's chief executive officer Jamie McPhee apologised for the move and conceded it was the wrong thing to do.
As a result the bank has decided to change back home loan redraw limits for any customers as they were prior to this happening.
"We are deeply sorry; we were trying to do the right thing but we went about it the wrong way," Mr McPhee said in an issued statement.
"Our priority now is to help, support and service our customers.
"We recognise that we need to do better, we can and we will."
The bank has set up a dedicated hotline for customers who want help changing back their redraw amounts or otherwise they can request it online.
ME has about 560,000 customers and the impacted accounts were on legacy home loan that were opened more than five years ago.
The bank removed the ability for customers to access some of their redraw amounts to ensure customers did not fall behind on their original payment schedules.
Mr McPhee said the changes decision to shift out redraw amounts was not done for liquidity reasons.
The Australian Financial Complaints Authority implemented an emergency response plan for major crises in relation to the ME rule change which has resulted in many complaints by disgruntled customers.
Originally published as ME Bank, Industry Super face probe over COVID-19 support