Trending Financial News 18 December

Banks must provide NO-FEE bank accounts

The Australian Banking Association’s updated Banking Code of Practice has been approved by  ASIC and will commence 1 March 2019.

Under the new code, all banks must offer a “basic account”, with no account keeping fees, no minimum deposits, free debit and a debit card for low-income customers. These everyday bank accounts cannot have overdrafts, dishonour fees or overdrawn fees.

ABA chief executive Anna Bligh said every bank will have a basic low fee or no fee account and will provide accessible banking services to people with limited English or living in remote areas.

Compare everyday transaction accounts from Australia’s banks and credit unions at InfoChoice

NAB faces $3B fine for charging dead people fees

National Australia Bank faces a civil action in the Federal Court by ASIC which alleges NAB charged customers fees for no service.

The Australian Securities and Investments Commission says NAB engaged in unconscionable conduct and improperly charged ongoing fees to thousands of financial advice customers.

The scandal was first exposed last year at the Hayne Royal Commission which heard NAB and other banks levied service fees on financial advice customers who had died.

NAB faces fines of more than $3 billion.

NAB commits to compo for charging fees for no service

National Australia Bank’s chief lawyer Sharon Cook said the bank is taking ASIC’s allegations, that the bank charged fees to dead people and other customers when it did not provide a service, very seriously.

“We take this action seriously and will now carefully assess the allegations, we will continue to work co-operatively and constructively with ASIC,” Ms Cook told the ASX.

NAB has already paid $37.8 million compensation to 27,500 NAB customers.

Ms Cook said remediation payments will be completed by June 2020.

Westpac pays for money laundering failures

For the second time in 2019 the banking regulator APRA will impose an immediate increase in Westpac’s capital requirements of $500 million “to reflect the heightened operational risk profile of the bank.”

Westpac is under investigation over allegations of systemic non-compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act alleged last month by Austrac.

APRA will also review Westpac’s risk governance include risk management, accountability, remuneration and culture. In particular APRA will look at the role played by Westpac directors and senior executives in not reporting suspicious transactions to the regulator and how they responding to information suggesting the bank was not complying with Austrac requirements.

Quantitative Easing is not just money printing

The Reserve Bank has set interest rates at 0.75 per cent and will not meet again to decide on rates until February 2020. The governor of the RBA, Dr Philip Lowe has said recently that the central bank may cut rates again in 2020 and has signalled that the RBA will look at alternative policy options to stimulate demand in the economy.

Those alternatives are often referred to as quantitative easing, often known as money printing, but it’s not as simple as that.

Hot shares to buy in December revealed at InfoChoice

In 2019, the ASX S&P200 [ASX chart from] has risen significantly. BHP is up from $31.99 to $39.99 today. Commonwealth Bank shares are up from $69 to $81.46.

Find out which shares are hot to buy in December 2019 at InfoChoice.

Owner occupiers are back in charge

Owner occupiers are driving the mortgage market and first home buyers are back in droves. New mortgage sales rose 2 per cent in October, according to the Australian Bureau of Statistics.

Lending to owner occupiers rose 2.2 per cent in October, the fifth consecutive monthly rise. First home buyers represented almost a third of the owner-occupier market.

New lending to investors rose by 1.4 per cent in October but was down 9.7 per cent over the year.

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