Commonwealth Bank executives jeered by customers in parliamentary hearing
Commonwealth Bank executives were jeered by aggrieved customers on Thursday during an appearance before a parliamentary committee where they conceded there had been failures of leadership and greedy behaviour at the bank.
Matt Comyn, CBA’s chief executive, and David Cohen, CBA’s chief risk officer, were appearing before the House of Representatives standing committee on economics in Parliament House to respond to revelations from the banking royal commission.
Multiple transgressions by CBA, stretching back years, have been revealed in the banking royal commission, including charging dead clients for financial advice, and charging customers fees for services that never materialised.
Thursday was the first time Comyn had appeared before the parliamentary committee since the royal commission hearings began in March, and after becoming chief executive six months ago.
He began his evidence by apologising for CBA’s behaviour in recent years, admitting CBA was wrong to oppose the banking royal commission.
“As the royal commission has shown, there have unfortunately been failures of judgement, failures of process, failures of leadership and in some instances greed,” he said.
“We have been too slow to identify problems, too slow to fix underlying issues, and too slow to put things right for customers. We became complacent.”
He conceded CBA should have implemented the Future of Financial Advice laws “in full” to abolish all conflicted remuneration for its financial advisers, rather than have those conflicts persist for years.
Comyn conceded trust had been damaged.
“Trust is absolutely the cornerstone of any financial institution, it needs to be,” Comyn said.
“And of course we recognise that it’s been damaged. It’s an enormous concern to us.”
A small group of aggrieved customers had come to see the CBA executives’ testimony and could be heard jeering during some parts of the testimony.
When the Labor MP Matt Thistlethwaite asked Comyn if some of the 9,000 people who had put submissions to the royal commission should be given a chance to give evidence at the commission publicly, some members of the public audibly interjected.
“Yes,” said one. “Definitely,” said another.
When Comyn said the royal commission process had been “very thorough and robust”, it provoked a few scoffs from the same group in the gallery.
Comyn was asked about the “Dollarmites” scandal inside Commonwealth Bank that involved widespread tampering by CBA staff of Youthsaver accounts in a bid to inflate their own bonuses and hit performance targets.
Staff used loose change, their own money, or the bank’s money to activate dormant Youthsaver accounts that had been created by customers who later failed to make a deposit. By “activating” the accounts, staff were able to count them towards sales or bonus targets.
Comyn said the practice was stamped out in 2013, but he admitted that no significant investigation took place to identify how widespread the practice was. Comyn was head of retail banking when the scandal was occurring.
Thistlethwaite asked: “So there was no investigation launched by the bank at the time about why this was occurring, how this was occurring, and how widespread the practice was?”
Comyn replied: “No, there wasn’t.” Thistlethwaite asked: “Why? You’ve got people tampering with other peoples’ accounts here. I mean, it’s not on the [same] scale but a similar issue occurred in the United States with Wells Fargo that sent shockwaves through the whole industry … why wasn’t this issue investigated?”
Comyn replied: “Well, unfortunately we don’t know the extent to how often
the practice occurred …”
During a mid-morning break in the proceedings, some of the people watching the hearing approached Comyn to talk to him, which he did, and he agreed to meet them properly once the hearing was over.He ended up meeting with six people individually, in a smaller committee room, for roughly 15 minutes each, to talk about their grievance with the bank, according to a CBA spokesman.CBA knew at least one of them was going to be there on Thursday, because he’d contacted them beforehand and Comyn had pre-arranged to meet him.