Trending Financial News 12 September 2019

CURRENCY CONVERSION RIP-OFF

Big banks under sustained fire from regulators

The big four banks and AMP Bank face 86 royal commission related investigations plus 59 other allegations against staff members, including two people facing possible criminal charges said the corporate regulator, the Australian Securities and Investments Commission.

There are 17 court actions now underway including ASIC’s appeal to the full federal court in the Westpac responsible lending case.

ASIC is hiring more lawyers to deal with the workload.

Two neobanks take on the big banks

Two new online banks have opened for business this week. Xinja Bank and 86 400 are both now offering transaction accounts and savings accounts to customers.

Both Xinja and 86 400 are online banks accessible only via mobile apps and online website. Neither bank has a branch or office open to the public.

86 400 has already issued its first mortgage – to a staff member and will launch a home loan product to the public in the near future. 86 400 says it is possible to create an account in as little as 120 seconds.

RBA says ‘unconventional’ rates policy is possible

The Reserve Bank is still prepared to cut interest rates, the central bank told a senate committee yesterday. And the RBA is even prepared to go further into unconventional monetary policy areas including quantitative easing.

“While unlikely at the current juncture, if circumstances were to warrant it, the board would consider unconventional monetary policy options.”

“This would involve reducing the cash rate to a very low level and possibly purchasing government securities.”

Currency exchange rip-off revealed

The competition watchdog, the Australian Competition and Consumer Commission says travellers find it hard to compare prices on foreign currency exchange services. The ACCC also found that Commonwealth Bank, ANZ, National Australia Bank and Westpac have some of the least competitive exchange rate deals around.

However, exchanging money at the airport is likely to be even more expensive. The ACCC reported that consumers can save $40 on an exchange of US$200 by choosing the cheapest option rather than an expensive airport currency dealer.

found when exchanging US$200, consumers could have saved themselves A$40 by purchasing from the cheapest supplier at a non-airport location.

And for the disorganised traveller, if you exchange money at the airport you’re going to getting robbed.

Consumer lobby lashes Commbank over loan offers

Commonwealth Bank is sending invitations to customers to apply for personal loans of up to $50,000. Lenders are no longer allowed to make unsolicited offers of credit card limit increases.

The Consumer Action Law Centre’s CEO, Gerard Brody, said Commonwealth Bank was encouraging people to “be overindebted.”

Commonwealth Bank fixed rate personal loans are now charging 11.99 per cent pa (comparison rate 12.87 per cent pa).

Commonwealth Bank variable rate personal loans are now charging 13.90 per cent pa (comparison rate 14.77 per cent pa)

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