Select a page

Banking News

Transparency scheme on the table

Transparency scheme on the table

(27 July 2012 – Australia) Financial Services Minister Bill Shorten has called on banks to reveal how much they lend to people in different areas of capital cities - and the interest rates they charge - in a United States-style transparency scheme. Banks would have to reveal detailed customer satisfaction data, where they have branches and how many people they employ in different postcodes.

Banks would also be compelled to show which areas commonly missed out on loans.

Shorten said he was worried banks were ignoring some customers on low and middle incomes because of the suburbs they lived in.

'Someone living in Liverpool or Bankstown should be able to see how many loans are made to small business, how many mortgages are being provided, and how easy it is to access credit in their suburb,' he said on Wednesday night, ahead of a speech in Melbourne.

'I want to see investment in jobs and capital flowing to successful local enterprise wherever they may be located, not just in suburbs with leafy green streets.'

Shorten said a lack of access to credit prevented middle and low-income earners from building wealth to provide for their future.

The Australian Bankers' Association (ABA) raised concern about the move, saying pushing banks to change lending rules risked creating bad credit.

'We need to be very careful about any measures from government that put pressure on banks to lend where they would not otherwise do so,' ABA chief executive, Steven Munchenberg said.

'It was well intentioned pressure from the US government along these lines that triggered the GFC.

'Demand for credit, including mortgages, is down at the moment. Banks are therefore competing fiercely for fewer customers and there are excellent deals available. But banks also have a responsibility to lend responsibly and should not be pressured by government to do otherwise.'
East & Partners's avatar

Comment on this article


Your comments will not be published. Required fields are marked *


Please enter the word you see in the image below:


Subscribe to our mailing list

Sign up now to keep up-to-date with the latest
market news and insights in B2B banking.

* indicates required

For more information please read our Terms and Conditions and Privacy Statements.