Page 4651 - Week 15 - Wednesday, 15 December 1993
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I am concerned, particularly with the case that I am currently investigating, that we have a decision to allow for mortgages to be bought by a particular bank. Notwithstanding that the original mortgage would have had a rate around about 9 per cent currently, that bank is now applying some mortgage rates of in the order of 13 and 14 per cent on the floating rate. To me that is a fundamental breach of the bankers trust, or the trust that people should have in banks, and the trust that allowed the transfer of the mortgages to this particular bank. For them to say that it is a commercial decision and an option that is available to them does not justify, in my view, them charging the rates that they do.
This is of concern because the types of mortgages that I am talking about are generally for people on lower incomes who are seeking to purchase their own home when allowed to buy government housing. Those mortgages which have been transferred to a bank, I believe, were transferred in good faith and agreed to on the basis that a maximum capped rate would apply, being the Commonwealth commercial bank rate. That is not the case, and I think that it is a profit grab by this particular bank in pursuing this matter and it is not in the interests of the clients, the community or the Government - any government. This was on a recommendation that the clients would be no worse off with the transfer of those mortgages if the clients agreed to the transfer. That simply has not been the case.
I believe now that both the original owner of those properties and the bank which currently owns the mortgage have to redress that problem. It has been impossible to achieve an appropriate outcome through the ombudsman, and the clients of the bank, in frustration, have now come to me. They say, "Look, we cannot go any further. We have tried every other avenue. To pursue them through the courts would cost us literally hundreds of thousands of dollars and it is an unequal battle". While I have great concerns about naming individuals in this house and imputing any improper motive to them without necessarily providing them with their day in court, so to speak, I think it is appropriate that this forum be used to draw to the attention of the wider community, and of us, as legislators, the fact that these problems exist. The banking industry at this stage does not seem to be prepared, as the Minister has outlined, to come to a reasonable regime of openness and accountability. It may very well be that we need to consider in this chamber a further legislative remedy to ensure that members of the public in Canberra are not further disadvantaged.
MR DE DOMENICO (3.58): Madam Speaker, I compliment Mr Connolly, Mr Stevenson and all the other speakers on this topic. I was very pleased to note Mr Connolly's comments in particular. He praised Mr Westende and the Liberal Party for taking the approach that we have taken. I assure members on the other side of the house that we will continue to take that sort of approach if it means protecting the interests of the people of the ACT.
Mr Connolly: If only your colleagues around Australia were so minded.
MR DE DOMENICO: Notwithstanding what our colleagues around Australia may or may not do, you can rest assured, Minister, that this Liberal Party will make sure that the interests of the individual are protected and are paramount. There is some good news from out of all of this as well. Whilst it is good to criticise those things that we do not agree with, there are some financial institutions that do the right thing. I will mention St George. It was a St George chief executive, as I recall, who said to the Martin inquiry that he believed that his customers should not pay for the privilege of doing business with them.
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