Australia’s main trade union body has called on ME Bank, which is owned by super funds controlled by unions and employers, to reverse its decision to suddenly cut the amount tens of thousands of customers could withdraw from their home loans.
“It is clearly unacceptable for a bank to create this level of uncertainty and stress during a crisis which is causing financial hardship for millions of Australians,” an ACTU spokesperson said.
“We have made it clear to them and we hope that MOI will rectify the situation.”
It is understood that the ACTU, which is believed to receive significant sponsorship income from ME Bank, has been in close contact with the bank over the weekend, pushing for a solution.
Clients last week complained the change reduced the amount they could take out of their home loans by thousands of dollars – money some said they urgently needed due to the coronavirus crisis.
ME Bank’s decision also came as a surprise to some customers, as they received letters about it dated before the decision, but what borrowers said they received only after it had already happened.
The Australian Prudential Regulation Authority (Apra) has asked ME Bank to explain what happened to determine whether it raises prudential regulatory issues.
“We have proactively written to Apra to provide relevant information on the redesign adjustments,” an ME Bank spokesperson said.
“We have not received any written request from Apra regarding redesign adjustments.”
Some of the 26 industry super funds that own ME Bank have also called on the bank to address the issue.
Gerard Noonan, chairman of ME Bank shareholder Media Super, told Guardian Australia the bank should not have made the switch during the coronavirus crisis.
He said Media Super spoke to ME Bank about the issue.
“We’re a little puzzled that it emerged from left field when he [ME Bank] performed better,” he said.
The anger of super funds and unions comes despite ME Bank’s efforts to play down the issue with its key stakeholders over the weekend.
In an email sent to unions and super funds on Saturday and obtained by Guardian Australia, the bank’s network distribution manager Jim Giannakopoulos said news reports on the matter “continue to point out some inaccuracies”. .
A ME Bank spokesman said this was not a reference to Guardian Australia’s report on the matter on Friday.
In his email, Giannakopoulos repeated the bank’s earlier statements that ME Bank had reduced withdrawal amounts to prevent customers from falling behind in loan repayments.
“No money was withdrawn from customer accounts,” he said.
“We understand that the change has worried some customers, especially in the current environment.”
He said the bank had moved staff to a call center to deal with angry customers.
The bank’s spokesman said it had “nearly tripled our ability to handle customer calls”.
“We have spoken directly with customers affected by this change and have been doing so since the first change took effect on April 25, 2020,” he said.
Guardian Australia understands that the bank has already told some customers that their full withdrawal amount will be restored.
The bank spokesman said the help offered to customers included extending the term of the loan, refinancing or topping up the loan, deferring repayments for six months or providing additional credit. .
Victorian Liberal MP Tim Wilson said he will ask ME Bank if it was to “provide loans to industrial funds to solve liquidity problems and therefore they need to make money from people’s clearing accounts to maintain their prudential risk profile “.
However, Noonan dismissed any link between ME Bank’s move and the super early withdrawals allowed under the government’s coronavirus support package which put some funds under stress.
“It’s laughable that this has to do with super fund liquidity,” he said.
He said Media Super had received about $33 million in early withdrawal requests and had about $400 million in cash.
ME Bank has been contacted for comment.