The Big Bad Banks hearing Round 1 – meh

Well that’s three hours of my life I won’t get back again. Round 1 of the House of Representatives economics committee hearing on Tuesday afternoon, featuring the CBA’s Ian Narev, was predictable, the CEO keeping his gloves well up and the pollies rarely landing anything like a blow.

The quality of most of the questioning was less than flash and the answers well-rehearsed. It foreshadowed that the next three rounds will be even less interesting if, presumably, the committee gave it their best shot against their most obvious target.

As it’s turned out, Round 2 – the ANZ’s Shayne Elliot – was a little more interesting. Nothing more was achieved, but it was more interesting with Elliot capable of a better mea culpa than Narev. The ANZ’s problems that have made headlines in recent years proved more specifically colourful than the CBA’s. Narev’s blocking was more boring than Elliot’s.

Still, the pattern was set in Round 1 where there wasn’t a single question about the vertical integration of financial planning – the banks controlling financial planners, the reality that leaves doubts about financial planning operations existing to move bank product.

And the hearing continues to fail to deliver the competing political objectives of both sides. It was neither good or bad enough to prove or disprove the need for a royal commission. Meh.

The Labor team will claim they didn’t have enough time to get into the “two days of questions” they had for the CBA and thus a royal commission is required. The government team will claim that Labor had the chance to come up with something and failed. There was no progression beyond the scandals already well covered in the media.

Oh, there were moments. In Round 1, Pat Conroy landed a few jabs in uncovering that not a single head has rolled over the CommInsure scandal. It seems a bonus or two might not have been paid. Scott Buchholz uppercut on the CBA’s “low cost” 13.2 per cent credit card being used heavily for cash advances and thus not low cost, while rates of more than 20 per cent were gouging customers, not being open and fair with them. Julia Banks was going somewhere with how superior reporting and whistle-blower handling was in her former industries of health and pharmaceuticals.

Adam Bandt, on a phone from somewhere, thought he was badly done by over how much time he had for questions and tried to pursue a question of how much the government backing was worth to the banks and who might pay for it.

And Matt Thistlewaite was onto something with his line about why the banks lobbied so hard to undermine FOFA if they were so interested in customer welfare just before my feed dropped out, plus his dig at the CBA hiring the Liberal Party’s recently-retired federal director as a consultant.

Yet it all went nowhere much. The expected platitudes kept coming. The bank is entirely focussed on customer satisfaction and, what’s more, the CBA has more customer satisfaction than the other big banks; the CEO’s pay is set by the board; individual cases of the bank’s failure to satisfy customers were terrible; the good old “the bank needs to be doing a better job” had a solid work out; and of course it’s really all a matter of balance – what’s good for customers, shareholders and the economy.

Between them, Narev and his chief risk officer said the CommInsure whistle-blower’s account of blowing the whistle wasn’t right and Thistlewaite wasn’t able to effectively challenge them on that. There were no Geoffrey Watsons (the counsel assisting the ICAC’s Eddie Obeid inquiry) on the committee.

But it was interesting that Narev seems so loath for the CBA to let go of sales incentives. Instead of simply scrapping them, every single payment plan in the bank apparently is being reviewed in case there are any conflicts of interest. The euphemism for “do you want fries with that?” banking apparently is “helping meet customers’ needs”.

And there was one magic moment for those of us who note such things: when a customer was done over by the bank, treated very badly, almost criminally some of us might think, it was “a process that wasn’t a customer-friendly process”.

Gold.

What’s particularly frustrating about the first two rounds – and no doubt what will be about the final two on Thursday – is that the pollies continue to go over so much old ground. For example: credit card interest rates and problems therewith received a bit of an airing during Round 1 and a lot more during Round 2 – but the issue had been comprehensively dealt with by a specific Senate economics committee inquiry that reported in December. It looked like the House of Reps types either hadn’t read that report or somehow thought they would magically receive different answers after asking the same sorts of questions.

Ditto Adam Bandt’s attempts to somehow suggest banks are responsible for expensive housing – we’ve already had parliamentary inquiries into housing affordability. Nothing new was brought to this game.

Half way through, these hearings look more like educational exercises for the committee members than any sort of exposition of bank nefariousness.

The difference between Round 1 and 2? Probably in the most quotable quote. For Narev, it was “a process that wasn’t a customer-friendly process”. For Elliot, it was in response to the question of why he thought the hearings were being held, why he was there. “We lost touch with our customers.” It was an admission of culture failing.

Michael Pascoe is one of Australia's most respected finance and economics commentators with over four decades in newspaper, radio, television and online journalism. He regularly appears on Channel 7's Sunrise and news programs and is a regular conference speaker, MC and facilitator.