BFCSA Blog

Led by award-winning consumer advocate Denise Brailey, BFCSA (Inc) are a group of people who are concerned about the appalling growth of Loan Fraud around the world. BFCSA (Inc) is a not for profit organisation in the spirit of global community concern and justice.

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Australian banks have fingers crossed for a Brexit delay Australian Financial Review Apr 1, 2019 12.00am Hans van Leeuwen   London | Australia’s banks will breathe a sigh of relief if Britain and the EU shift to a long Brexit delay in the coming two weeks, as none have reached the formal finish line in the race to set up a European subsidiary by the cliff-edge deadline of April 12. Macquarie Group, Commonwealth Bank and Westpac Banking Corp have each chosen a European city, but are still waiting for the final green light for a licence from the local regulators. ANZ Banking Group is relying on existing European branches and licences. National Australia Bank looks to be the laggard, having not yet applied for a banking licence on the Continent. The arrival of Brexit, whenever it may come, will end the ability of London-headquartered financial services companies to operate across the...
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ASIC takes the gloves off in NAB brawl The Australian 12:00am April 1, 2019 Richard Gluyas   EXCLUSIVE  National Australia Bank collided with the Australian Securities & Investments Commission’s new, take-no-prisoners enforcement policy late last year, with the conduct regulator taking the unusual step of opposing mediation in the fees-for-no-service case brought against the recalcitrant bank. Federal Court judge David Yates knocked back the regulator’s pitch, ordering mediation to take place next Monday, April 8. However, ASIC’s unreported move — based on an assessment that there was little point in going through the charade of mediation — was an early marker of the “why not litigate” mantra adopted by deputy chairman and chief prosecutor Daniel Crennan QC. The regulator’s frustration with NAB, which has mainly been directed at the old board and management regime led by chairman Ken Henry and chief executive Andrew Thorburn, spread to Canberra last week in the...
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Financial planners resisting Westpac’s sell-off to Viridian The Australian 12:00am April 1, 2019 Joyce Moullakis   EXCLUSIVE  Westpac is facing headwinds as it looks to offload some of its loss-making financial planning unit to boutique Viridian Advisory, and ultimately exit financial advice. The Australian understands the transaction is facing resistance from planners, including a group of up to 15 with the largest customer books who will opt not to join Viridian. Westpac’s most senior financial planners, known as the partnership group because they also share revenue with the bank, must decide in coming days whether to accept Viridian offers and a separate incentive payment from Westpac to assist in buying shares in the boutique. Other planners and support staff that are part of the 175 employees earmarked to transition to Viridian are yet to receive their ­offers. Sources said those who were offered positions deemed by Westpac to be comparable to...
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Banks may face UK-style claims as costs tipped to hit $6bn Australian Financial Review Mar 31, 2019 11.00pm Jonathan Shapiro, James Eyers   The costs to the major banks of remediating misconduct could top $6 billion by the end of next year, as analysts and former banking executives warn the torrid experience of shareholders in the United Kingdom offers a guide of what lies ahead. JPMorgan analysts Andrew Triggs and Nicholas Dalton last week increased their estimates for remediation costs by $125 million for ANZ and Commonwealth Bank and $300 million for National Australia Bank, after Westpac said compensation costs would wipe $260 million off its half-year profit. The analysts said the revisions would shave between 1 per cent and 3 per cent off the full-year net profits of ANZ, CBA and NAB, as they increased their forecast for total remediation provisions across the big four banks by $500 billion to...
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Moody’s warns Australian public debt will keep rising MacroBusiness 12:10 am on April 1, 2019   David Llewellyn-Smith   Yes it will: OVERVIEW AND OUTLOOK The credit profile of Australia (Aaa stable) reflects its very high economic strength, buttressed by its robust growth potential and demonstrated flexibility in adjusting to a shifting economic environment. The latter has been reflected in the economy’s ongoing adjustments to changes in the role of the resources sector in providing growth impetus. A solid institutional framework, including transparent and effective monetary policy and financial regulation, also underpins Australia’s creditworthiness, lowering the probability and likely impact of potential economic and financial shocks. Australia’s relatively moderate debt burden also supports credit quality, despite fiscal consolidation challenges. Recent periods of lower nominal GDP growth compared with the commodity boom years have constrained revenue increases, although solid gains in employment and higher-than-expected commodity prices have been supportive. A more fragmented...
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Sixty-nine millionaires paid zero tax in 2016-17 ABC News30 March 2019 Nassim Khadem, Michael Janda   Sixty-nine Australians who earned more than $1 million in the 2016-17 financial year did not pay a cent of income tax. Annual data from the Australian Tax Office, released on Friday, shows the list of Australia's millionaires paying no income tax is growing. The data shows in 2016-17, 60 people who declared total incomes above $1 million reported taxable incomes below $6,001, two posted taxable incomes between $6,001 and $10,000, and eight declared taxable incomes between $10,001 and $18,200, putting them all below the tax-free threshold. Not one of them paid the Medicare levy. Sixty-nine of them reduced their tax bill to zero, each claiming millions in deductions, primarily for the "cost of managing tax affairs", but also for "gifts or donations". This was up from 62 who paid no tax the year before. The...
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ASIC probe found huge profits in CBA term deposit rort The Australian 12:00am March 30, 2019 Ben Butler   EXCLUSIVE  An Australian Securities & Investments Commission investigation found Commonwealth Bank obtained “hugely inflated profits” by ripping off term-deposit customers in an elaborate strategy that included hiring data analytics firm Quantium, previously secret documents reveal. A December 2008 ASIC memo, obtained by The Weekend Australian after a 20-month Freedom of Information battle, also reveals the role played in defending CBA by one-time contender for ASIC chairman and current AMP non-executive director John O’Sullivan, who at the time was the bank’s top in-house lawyer. Mr O’Sullivan told The Weekend Australian his role in the issue was investigated by the Turnbull government in 2017, when he was in the running to succeed Greg Medcraft as ASIC chair, and he was cleared. In October that year, Mr O’Sullivan, who was Credit Suisse’s Australian chairman at...
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Unspent billions shifted from the books of NDIS agency The Australian 12:00am March 30, 2019 Rick Morton   EXCLUSIVE  A multi-billion-dollar underspend by the National Disability ­Insur­ance Scheme would once have sat on the books of the independent agency running the program­ but now sits with the governing depart­ment after a change of rules. In the final budget outcome for 2017-18, the underspend for the scheme — due to delays in reaching targets and participants spending between 60 and 70 per cent of their allocated support — was $2.5 billion but that figure has now climbed dramatically as problems persist. National Disability Insurance Agency deputy chief executive Vicki Rundle told The Weekend Australian she “could never guarantee­” what any government would do with the money. “Governments, of course, year-on-year, will look at expenditure and I could never guarantee to you in any year what a government would do,” she said. “It...
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Micro-regulation and fearful bankers are crimping credit Australian Financial Review Mar 26, 2019 11.07am James Frost   The availability of credit is being squeezed by the emergence of micro-regulation which is weighing on the size of loans small businesses can afford while making bankers fearful of making a mistake, Westpac’s business banking boss David Lindberg said. Mr Lindberg – who was appointed to head up Westpac’s consumer banking division following an executive reshuffle last week – said responsible lending obligations and weaker house prices had contributed to a situation where business investment had “ground to a halt”. Mr Lindberg said the combination of small business owners feeling the wealth effect and over-zealous bankers who were making borrowers go into excruciating details because "there are scared of making a mistake" was making matters worse. Westpac's David Lindberg said a rise in 'bank fear' was exacerbating the credit squeeze. Peter Braig “Australian businesses...
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Melbourne’s McMansion meltdown deepens MacroBusiness 10:15 am on March 29, 2019 Leith van Onselen. Last year it became apparent that Melbourne’s house and land market had become an giant bubble after the median price for a housing lot hit $339,000 – up 21% in only 12 months – with steeper rises in the cost per square metre:  Mid last year we learned that that Chinese developers had taken control of Melbourne’s land supply pipeline, driving much of the price increase: Chinese developers have taken a virtual stranglehold on the future supply of new housing in Melbourne’s outer suburbs after acquiring more than two-thirds of all big greenfield land parcels offered for sale in the past 18 months, in deals worth about $2 billion. This surge of foreign capital has pushed broadacre land values above $1 million a hectare and contributed – along with planning and infrastructure delivery bottlenecks – to the...
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Housing weakness sees drop in wealth The Australian 12:00am March 29, 2019 Samantha Bailey   Falling house prices and weakness in the stockmarket late last year drove a 2.1 per cent drop in household wealth for the December quarter, the largest quarterly fall since September 2011. Household wealth per capita fell $10,198 to $404,319, following a $2263 fall in household wealth in the previous quarter, according to the Australian Bureau of Statistics. That reflected falling property prices and superannuation losses due to stockmarket falls during the December quarter, the ABS said. It was the first time since 2011 that household wealth per capita had declined for two consecutive quarters. Over the December quarter, the ASX 200 fell 9.04 per cent, compared with a 0.21 per cent rise the previous quarter. The market falls came as home values in Sydney fell 3.9 per cent over the December quarter, according to CoreLogic, in...
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UBS: “Calling the end of the household super leverage cycle” MacroBusiness 12:19 am on March 29, 2019 George Theranou (UBS research note) Households are still leveraging. Even though household liabilities growth dropped to a >5-year low of 4.2% y/y, because nominal income growth collapsed even more to just 2.0% y/y, the household debt-to-liabilities ratio lifted to a record high of 199% in Q4- 18. However, mainly due to falling house prices, household wealth dropped 2.1% q/q, the largest fall since 2011, to be down 1.3% y/y. While this followed a surge to a record high level of $10.4tn, critically, the ‘household wealth effect’ is due to a change in the savings ratio driven by changes (not the level) of wealth. This is consistent with an ongoing drag on consumption ahead as spending slows to weak income growth. Overall the lead indicators of the labour market are clearly weakening. Even ABS job vacancies...
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One Nation wanted millions from the NRA while planning to soften Australia's gun laws by political reporter Melissa Clarke Secret recordings of senior One Nation figures reveal the party wanted millions of dollars in political donations from America's National Rifle Association and discussed softening its policies on gun ownership as it tried to secure the funding. Key points: James Ashby and Steve Dickson's meetings with the NRA were secretly recorded by a fake gun lobbyist The trip to secure NRA funding took place weeks before laws passed banning foreign donations The pair were advised on how to respond to gun control advocates when mass shootings occur   Pauline Hanson's chief of staff James Ashby and the party's Queensland leader Steve Dickson were covertly filmed during a series of meetings with powerful pro-gun advocates in Washington DC last September. Footage from inside the meetings, broadcast overnight as part of an Al Jazeera investigation,...
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ASIC responsible lending crimps credit: ANZ and NAB John Kehoe  27 March 2019    https://www.afr.com/news/economy/asic-responsible-lending-crimps-credit-anz-and-nab-20190327-p517xu    ANZ Banking Group and National Australia Bank are at loggerheads with corporate cop James Shipton, who has slammed bankers for spreading a "myth" that the regulator's responsible lending crackdown is exacerbating a credit squeeze.    ANZ chief executive Shayne Elliot said bankers reacting cautiously to the Australian Securities and Investments Commission's more stringent application of lending standards meant some home buyers and businesses "will find it harder to borrow".  He also rebuffed ASIC chief prosecutor Dan Crennan's ambitions to lock bankers in jail, in response to questions from Liberal MP Tim Wilson about unintended consequences from a royal commission-inspired clampdown.   "People should pay the consequence of poor behaviour or misconduct or breaking the law," Mr Elliott said at a parliamentary hearing in Canberra.     "I would have thought the right outcome here is not how many people are in jail but do we have a fully functioning financial system that is responsible and generating good outcomes for our...
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MacroBusiness Fund podcast: Phil Soos exposes Australian mortgage fraud By Tim Fuller in Australian banks at 12:20 am on September 28, 2018 https://www.macrobusiness.com.au/2018/09/mb-fund-podcast-phil-soos-exposes-australian-mortgage-fraud/    ...
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Canadian households “freaking-out” over debt. What about Australia’s 120.5% of GDP? MacroBusiness 12:10 am on March 28, 2019 Leith van Onselen   According to Bloomberg, Canadians are “freaking out” over the level of household debt, which is now the highest of the G7 nations at 100% of GDP: Household debt in Canada, a nation generally known for moderation, has reached levels that could be qualified as excessive. Canadians owe C$2.16 trillion—which, as a share of gross domestic product, is the highest debt load in the Group of Seven economies. With the housing market cooling, a reckoning may be fast approaching. People are “freaking out,” even though, with interest rates not far above historical lows, “money still costs nothing,” says Scott Terrio, a Toronto-based manager at Hoyes, Michalos & Associates Inc., a company that specializes in insolvency. Until recently, Canada had been lauded as a bastion of sound financial management. The country of...
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Let’s WeChat: Shorten in direct pitch to Chinese The Australian 12:00am March 28, 2019 Ben Packham, Heidi Han   EXCLUSIVE  Bill Shorten has made a dramatic move to win back support from Chinese-Australian voters following last week’s disastrous NSW election defeat, declaring Labor is not a racist party and that he welcomes the rise of China as a global power. In a group chat with nearly 500 Chinese-speaking voters on the WeChat Live social media service — the first by an Australian ­political leader — Mr Shorten said yesterday that Labor would make it easier for ­immigrant families to get visas for ageing ­parents, and highlighted the governme­nt’s past attempt to ­introduce a university-level ­lang­uage test for would-be ­citizens. Days after intervening to blast out Michael Daley as NSW Labor leader following his damaging anti-Asian comments, the Opposition Leader told Chinese-­Australian voters that “racism from anyone is unacceptable”. Mr Shorten —...
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Property parasites swarm policymakers MacroBusiness 12:14 am on March 27, 2019 Leith van Onselen   SQM Research’s flawed and debunked analysis of Labor’s negative gearing policy looks to have united Australia’s property parasites. The Real Estate Institute of Australia (REIA) has warned of economic Armageddon from Labor’s policy: “The losers are mum and dad investors, home owners, renters, the construction industry, state governments and the economy”… “There are no winners. Even first home buyers will face a faltering economy with lower employment prospects,” the REIA president concluded. The Housing Industry Association (HIA) has warned of soaring rents: “Changes to existing capital gains tax and negative gearing arrangements on residential investment properties proposed by the federal opposition will dampen first home buyer capacity to save for their first home,” explained MD at HIA, Graham Wolfe… “Any increase in rental costs will impact capacity to save a deposit, extend the savings’ period and...
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Unit glut turns to drought as apartment projects ditched by developers The Australian 12:23pm March 27, 2019 Mackenzie Scott   The apartment glut may quickly dry up as the number of deferred and abandoned developments rose 168 per cent last year, with Australia’s peak development body warning of a broader “imminent cliff-fall in future supply” across capital city housing markets. New data from the Urban Development Institute of Australia (UDIA) State of the Land report shows kinks in the pipeline are being felt in all capital city markets. Last year, 168,580 projects were deferred or abandoned compared to just 62,880 in 2017, an increase of 168 per cent. However, it is the number of unit abandonment in capital cities that grew most notably, up 400 per cent from 22,000 units in December 2017 to over 110,000 in December 2018. UDIA national president Darren Cooper said the number of projects being abandoned...
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Australian Banks and Bankers are too addicted to property Australian Financial Review Mar 27, 2019 3.54pm James Frost   Australian bankers have all but lost the skills to be able to lend money to the engine room of the economy with small to medium businesses proving too difficult to understand for the vast number of business bankers. Joseph Healy, former NAB banker and co-founder of challenger SME lender Judo Capital, said Australian bankers were addicted to property saying they would prefer to lend to a customer buying a holiday home than an entrepreneur who is going to hire 10 people. “You’ve got a generation of bankers who have lost the ability to bank SMEs. They know how to bank real estate because of LVR (loan-to-value ratio) ... but in the middle the heartland of the economy, the knowledge is insufficient.” On Wednesday, Judo's Mr Healy said it was the fault of...
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