16 Jul ASIC decision on Westpac ruling appeal due ‘within days’
Cliona O’Dowd – The Australian – Thursday 16 July 2020
ASIC will decide in the coming days if it will embark on a last-ditch attempt to secure a win in the Westpac “wagyu and shiraz” responsible lending case, chairman James Shipton has told a parliamentary committee, as the corporate regulator was forced to defend the pace of its investigations into money laundering breaches at the nation’s two largest banks.
Appearing at an oversight committee hearing into the regulator’s performance on Wednesday, Mr Shipton also voiced his frustration over the time and money financial institutions have been spending on their remediation programs to ensure they don’t overcompensate customers, saying ASIC was doing everything it could to get refunds into customers’ pockets.
Under questioning from Senator James Paterson on whether it was time for ASIC to “accept the umpire’s verdict” in the responsible lending case, Mr Shipton said the regulator was still taking advice on how to proceed.
“We’re currently taking advice on the decision of the full Federal Court and that advice is coming in from external council and we will review that advice in the next coming days.
“We are taking this decision extremely seriously and with all the due care that is important for a decision like this,” he said.
While Senator Paterson suggested Friday was the deadline for an appeal, Mr Shipton indicated the decision could stretch out to next week.
“Friday is an aspirational day and it may (be later), give or take depending on procedural matters relating to liaising … with the Solicitor General. That liaison should start early next week, hence why I said in the coming business days a decision will be made,” he said.
The corporate regulator last month lost its appeal in the landmark “wagyu and shiraz” case.
ASIC had alleged that Westpac had breached its responsible lending obligations by failing to adequately assess prospective borrowers’ expenses.
Dismissing ASIC’s appeal in late June, the Federal Court ordered the regulator to pay Westpac’s costs.
Mr Shipton declined to answer a question from Senator Paterson on whether ASIC should move on from the case to provide clarity in the law.
“I would pause in responding because it would be premature for me to comment on any action ASIC may take. We’re just receiving external advice on the matter and we need to digest all of the opinions and advice we’ve received.
“We have yet to sit down as a formal commission and make a decision,” he said.
He was also unable to confirm how much of taxpayers’ money had been spent on ASIC pursuing the case over the past three years.
Facing a grilling from Senator Deborah O’Neill over the pace of its investigation into CBA’s money laundering breaches, which has dragged on for three years, and a second money laundering investigation into Westpac, ASIC deputy chair Daniel Crennan confirmed they were both “afoot” and said the Westpac case shouldn’t take as long as CBA’s because “the investigation started quickly and senior counsel started very early on”.
“Could you hazard a guess as to how long it will take people to get a fair and just response?” Senator O’Neill asked.
“I’m not in a position to give a response with any certainty as to the timing except to say that introducing senior counsel and investigating very quickly, that is to say immediately after the statement of claim was filed, should significantly enhance the pace of the investigation,” Mr Crennan said.
Turning her attention to remediation programs, Senator O’Neill raised concerns about media reports that suggested institutions were spending large amounts of money on consultants to ensure customers weren’t overcompensated.
“It doesn’t seem to me that the banks have figured out what Royal Commissioner Hayne was trying to teach them. What’s happening in this space?” she asked.
Mr Shipton assured her that ASIC was continuing to engage with financial institutions on the issue.
“We continue to work with them to accelerate remuneration, particularly in these times because every dollar back to where it should be is what we’re aiming for.
“Trust me, we continue to have very robust and forthright conversations with financial institutions on accelerating these remuneration programs and not getting tied up in bureaucracy and unnecessarily prolonging the program and unnecessarily relying on external consultants.”
Going further with her line of questioning, Senator O’Neill asked if there was any further action ASIC could take to admonish the banks.
“I certainly share your frustration,” Mr Shipton replied. “We are doing everything we can; we are looking forward to a directions power, which from a regulatory perspective will be a very useful tool. But trust me, we are utilizing all the tools we have available.”
The directions power, which is expected to be introduced into parliament by the end of the year, will allow ASIC to give directions to financial services and credit licensees to prevent or address suspected breaches of the law.