1305, 12 Glen St - The Pavilion on the Harbour'
Milsons Point NSW 2061

13 November 2018

Mr. Bernard Keane bkeane@crikey.com.au (03) 8623 9900
Crikey
Level 6, 22 William St,
Melbourne Vic. 3000

Dear Bernard

I have prepared Thirty Two Written Questions (and the Supporting Documented Evidence) for the Royal Commissioner regarding breach of Statutory Duty, ostensibly by the Reserve Bank of Australia (Principal Regulator of the Payments System) and minimally by APRA or ASIC in Setting New Standards for Credit Card Products:

* 14 Questions to ask the Governor of the Reserve Bank of Australia - RBA's Submission to the Financial System Inquiry - March 2014 declared it to be the Principal Regulator of the Payments System through the PSB in Box 8A: The Roles of the Reserve Bank in the Payments System

* 2 Questions to ask the Chair of APRA

* 1 Question to ask the Chair of ASIC

* 2 Questions to ask the Chair of the Council of Financial Regulators

* 2 Questions to ask Chair of the ACCC
* 1 Question to ask the CEO of the Australian Bankers Association re Unconscionable Credit Card Interest Charging for over 20 years

* 10 Questions that ask the Royal Commissioner to implement material changes re Credit Card Products

I wish to publish my Thirty Two Written Questions (and the Supporting Documented Evidence) on a website (after each Question has been peer reviewed). I would then email Financial Services Reformists and other Interested Entities seeking them to review my Thirty Two Written Questions in the hope that the Royal Commission would be encouraged to rely upon them

Could you provide to me contact details of one or two economic/legislative academics, or other Australians, that are fervent that the Royal Commission ensures that Two Of Australia's Three Financial Services Regulators rely upon their existing regulatory powers to regulate that Credit Card Issuers desist inter alia Predatory Marketing by Numeracy And Literacy Targeting of some Credit Cardholders?

Such targeted Credit Cardholders possess only level 1 (or below) and level 2 Financial Literacy Capacity and are vulnerable to becoming a Revolver (61.87% circa are Occasional Revolvers and 38.13% circa are Persistent Revolvers) that often pay Usurious Unsecured Interest Rates which is contrary to the RBA's parliamentary decreed role to ensure "...the economic prosperity and welfare of (all) the people of Australia"

Should you provide me the contact details of academic economists/legislators equipped to peer review my Thirty Two Written Questions, if you were interested I would provide a written commitment to you to have first rights to write an article/s in Crikey, on any of them that you wanted to. I would also provide a written undertaking to acknowledge the input of any economic/legislative academic/s who reviewed my Thirty Two Written Questions and vitally the Supporting Documented Evidence. Such acknowledgement of any peer reviewer's would appear immediately under my final Written Question on the website

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I worked for CBA for 37 years, retiring in 2007. I evidenced a lot of change in CBA and across the banking sector - some good and some bad. I hold a Master Degree in Applied Finance from Macq University.

I write to you because of your article 'The real story behind the credit card debt headlines' 5 July 2018 (with Glenn Dyer) which reported on 18-201MR ASIC’s review of credit cards reveals more than one in six consumers struggling with credit card debt that noted inter alia:

"As of June 2017:

there were 14 million open credit card accounts, an increase of over 300,000 since 2012.

Outstanding balances totalled almost $45 billion.

Approximately $31.7 billion in balances on credit cards that were incurring interest charges.

Consumers were charged approximately $1.5 billion in fees in 2016-17, including annual fees, late payment fees and other amounts for credit card use."

If you click on my Defined Terms and Documents file re Credit Card Products you will glean -

· 330 circa Documents that I have read and summarised in htm files all accessible through embedded threads; and

· 230 circa Defined Terms that I have created to establish certainty of mindset,

that I have created since 2011 when in that December I posted a comprehensive submission (on CD) to the RBA which implored it to Set New Standards to apply the User Pays Principle for Credit Cards issued in Australia.

After a few emails and a 'phone chat with Ms. Sharon van Etten, Public Relations Officer, Media & Public Relations Office, Reserve Bank of Australia in late Nov 2011, the Writer posted on CD his detailed Submission dated 8 Dec 2011 to the Reserve Bank that beseeched the RBA to rely upon its existing Extensive Powers to Determine and Set New Standards, relying on Section 18, that would require Credit Card Issuers in Australia to apply the User Pays Principle - listed A) to H) in his Section 8 - because -
* Transactors enjoy their Lines of Credit for virtually no cost; and
* Persistent Revolvers that possess poor Financial Literacy Skills contribute 80% circa of all Interest And Penalty Fees Revenue generated from Credit Card Products.

I am pleased with the performance of the Royal Commission into misconduct in the Banking, Superannuation and Financial Services Industry. However, Terms of Reference to a Public Submission pursuant to the Royal Commissions Act 1902 (Cth) and clauses (g), (h) and (j) of the Terms of Reference are limited to submissions from wronged customers that describe their grievance/s. I haven't been wronged. I hold two credit cards. I have not paid a cracker in fees or interest in well over 20 years.

Alas, with regard to holding Australia's Three Financial Services Regulators to account, in particular Australia's Principal Regulator of the Payments System, regarding Unconscionable Conduct by some Credit Card Issuers, those narrow Terms of Reference are not recognising and rectifying 'regulator bias' which has, in particular, plagued the RBA to the detriment of Persistent Revolvers for over 20 years; most of whom possess low Financial Literacy Capacity with many experiencing Extreme Financial And Emotional Distress.

As further evidence of my research of Credit Card Products,

(a) I posted my 1st Submission Letter to Maurice Blackburn on 8 May 2017 and my 2nd Submission Letter to Maurice Blackburn on 25 June 2017 (on DVD) asking it to run a Class Action representing 400,000 circa Eligible Persistent Revolver Plaintiffs against the Reserve Bank of Australia for breach of its Statutory Duty and Fiduciary Duty. My Labyrinth of ‘Concealed Spiders' provided nine examples of Unconscionable Conduct by Credit Card Issuers of Predatory Advertising their various Credit Card Products to extricate maximum Interest and Penalty Fees Revenue from Financially Uneducated Credit Cardholders which constitutes Numeracy And Literacy Targeting - My allegations are also acknowledged in Quotes from reputable Credit Card Distress Authorities about unconscionable advertising of some Credit Cards by some Credit Card Issuers resulting in some indebted Credit Cardholders being issued multiple Credit Cards.

Maurice Blackburn’s response letter to me dated 14 July 2017 included:

"Conclusion

In our view there would be legal risks associated with a claim in relation to the circumstances outlined in your letter and for this reason the proposed claim does not meet our criteria for the pursuit of a class action.

Although it may be the case that financially vulnerable consumers are at risk when it comes to credit card products, we think that the concerns outlined in your letter would be best addressed by legislative or regulatory change that is designed to protect the interests of these consumers. In this regard, we suggest that you contact your local Member of Parliament to continue your advocacy on behalf of vulnerable consumers." ; and

(b) I emailed my Public Submission: Sent 22 April 18 to the Royal Commission which included 30 Written Questions for the Royal Commissioner to consider asking to either:

· Governor of the RBA

· Chairman of APRA

· Chair of ASIC

· Chair of the Council of Financial Regulators

· Chair of the ACCC.

Unfortunately the Terms of Reference for the Royal Commission into misconduct in the Banking, Superannuation and Financial Services Industry are limited to wronged customers describing their grievances. As acknowledged further above, I do not fall within those narrower eligibility Terms of Reference.

(c) The UK Guardian article 'The interest-free credit card trap snaring unwitting borrowers' is rife with examples of UK Credit Card Issuers' Predatory Marketing directed at Financially Uneducated And Vulnerable Credit Cardholders that Lack Financial Acumen. There is a welter of evidence that U.S. Credit Card Issuers are not immune from similar Unconscionable Credit Card Advertising.

   One could presuppose: "Well why shouldn't it be any different in Australia?" It SHOULD be different in Australia, because Australia's 'central bank' has unique powers and exceptional responsibilities "...to.......... the economic prosperity and welfare of the people of Australia" and for its Payments Systems Board to always Act in the Public Interest, not held by the 'central bank' of the UK or the USA.

   Below is an extract from the Writer's page titled Australia's Principal Regulator of the Payments System:

"The Reserve Bank of Australia's -

            A.      powers to gather financial information from ADIs under Part 5—Miscellaneous, Section 26 of the Payment Systems (Regulation) Act 1998; and

            B.      responsibilities to 'inter alia' "best contribute to.......... the economic prosperity and welfare of the people of Australia" in terms of Section 10(2) 'Functions of Reserve Bank Board' of Reserve Bank Act 1959 which includes -
           " ....inform the Government, from time to time, of the Bank's monetary and banking policy" under Section 11(1) of the Reserve Bank Act 1959;

                      to set Standards that "are in the public interest" relying on Division 4, Section 18 of the Payments System Regulation Act 1998 for a Payments System that it Designated on 12 April 2001 (under Division 2—Section 11 of the Payment Systems (Regulation) Act 1998; and

                       to re-regulate commercial bank interest rates relying on Section 50 of the Banking Act 1959 that "are in the public interest",

are more extensive/inflexible/onerous than the -

1.       Bank of England, that was not nationalised as Britain's central bank until 1946, which is a corporation wholly owned by the UK government - the 'Corporate governance: Board responsibilities' – SS5/16 (Short form) focus on the Corporates it regulates with no apparent obligation to best contribute to the peoples of Britain; and

2.       U.S. Federal Reserve that was established as the United States' central bank until 1913, although the below item 7. "Promoting Consumer Protection and Community Development." obligates the U.S. Fed to research the impact of financial services practices on consumers and communities:

                    "The Federal Reserve advances supervision, community reinvestment, and research to increase understanding of the impacts of financial services policies and practices on consumers and communities."

   Australia's 'central bank' has never exercised its rights -

   *        under Part 5—Miscellaneous, Section 26 of the Payment Systems (Regulation) Act 1998 to ask for financial data from the major Credit Card Issuers of Interest & Penalty Fees revenue for each of their Credit Cardholders for all Credit Card Products for a minimum of 12 months in order to establish if the User Pays Principle applies, notwithstanding that the RBA argued for greater application of the User Pays Principle in its paper "Reform of Credit Card Schemes in Aust: "A Consultation Document" in Dec 2001; or

   *         under Section 11(1) of the Reserve Bank Act 1959 to " ....inform the Government, from time to time, of the Bank's monetary and banking policy" having regard to its obligations under Section 10(2) 'Functions of Reserve Bank Board' of the Reserve Bank Act 1959 to "best contribute to.......... the economic prosperity and welfare of the people of Australia", to set new Standards under Division 4, Section 18 of the Payments System Regulation Act 1998 to re-regulate a maximum Purchase interest rate and a maximum Cash Advance interest rate after it published LOAN RATE STICKINESS: THEORY AND EVIDENCE in June 1992 to adopt other User Pays Principle fee changes that -

             *        the RBA recommended in Dec 2001; and

             *        the Writer recommended in Section 8 of his letter (on CD) to the RBA dated 8 Dec. 2011 - explained in Point 9 of Supporting Evidence re 1st Question.