Thirty-Two Written Questions and Supporting Documented Evidence (as at 10 Feb '19) Directed to a Financial Services Regulator or a Royal Commissioner

CLICK ON BELOW QUESTION
NUMBERS

Question
Recipient

Issue/Problem/Negligence/Predatory/Discrimination/Deceit/Unconscionable 'et al'

 Click on Number of Supporting
Evidence
Documents

 1st

Royal
Commissioner

Will the Royal Commission request financial data from the primary six Credit Card Issuers (Four Pillars, Citibank and Latitude Financial nee G.E. Capital) that identifies the contributors of Interest And Penalty Fees Revenue to test the Writer's calculation that Persistent Revolvers account for 12.58% circa of 7,515,000 Credit Cardholders - June 2016), yet contribute 80% circa of all Interest And Penalty Fees Revenue?

12

2nd

Governor of the Reserve Bank

Why did the Reserve Bank published LOAN RATE STICKINESS: THEORY AND EVIDENCE in June 1992 and never act upon its 'sticky' findings re the plummeting Overnight Cash Rate, in particular of the need to determine a new Standard to re-regulate a maximum interest rate for -

*     each Credit Card Purchase; and        

*     each Credit Card Cash Advance,
as the Writer recommended in Section 8 of his Submission to the RBA dated 25 Oct 2011?

12

3rd

Governor of the Reserve Bank

What did the Reserve Bank hope to achieve from publishing
Reform of Credit Card Schemes in Aust:  "A Consultation Document" in March 2001?

Why hasn't the RBA over the subsequent 17 years informed the Commonwealth government, as obligated under Reserve Bank Act 1959 - Section 11, 'Differences of opinion with Government on questions of policy' of the need to determine in the Public Interest new Standards to apply the User Pays Principle to the Retail Supply Side of Credit Card Products?

3

4th

Governor of the Reserve Bank

Will the Reserve Bank set a new Standard, pursuant to Division 4 Section 18, to replace the debt 'lure' of an Interest Free Period with a -

*      Concessional Interest Rate Period; and

*      Purchase Usage Fee,

for each Purchase with a Credit Card, so that each user pays for the benefits of their Revolving Line/s of Credit?  Because the Merchant is funded within 24 hours by the Credit Card Issuer, but the Cardholder does not pay for each Purchase or Cash Advance for up to 55 days later?

2

5th

Governor of the Reserve Bank

Does the Governor of the Reserve Bank agree with the former Assistant Commissioner, Dr. Malcolm Edey's, below response to a question from the Acting Chair of the Senate Economics Legislation Committee on 1 June 2015?
        "... we do not have an interest rate regulator in Australia............... What we do have is an ACCC that can investigate uncompetitive conduct if they see it, but they clearly have not seen it in this market."

3

6th

Governor of the Reserve Bank

Does the Governor of the Reserve Bank concur with the 1st paragraph on page 3 of Senate 'Economics Reference Committee' summary report titled Interest rates and informed choice in the Australian credit card market dated Dec. 2015 which justified Dr. Edey's response (listed in Question 5) which asserted that the ACCC is responsible to monitor and regulate credit card interest rates, even after the RBA had Designated, established an Access Regime and Determined a Standard/s?

3

7th

Governor of the Reserve Bank

Does the Governor of the Reserve Bank agree with Dr. Malcolm Edey's below responses to the Senate 'Economics Reference Committee' on 1 June 2015 because it is contrary to the findings in LOAN RATE STICKINESS: THEORY AND EVIDENCE in June 1992 and empirical evidence in the USA, the UK and Australia over the subsequent 26 years?

   "Yes, the financial system works through competition. The basic wholesale interest rate is the cash rate, which we set, and then competitive forces will cause other interest rates to move up and down with the cash rate. That is the way the effect of policy is transmitted to the wider economy."

5

8th

Governor of the Reserve Bank

Is the Governor of the Reserve Bank in possession of empirical evidence that supports Dr. Malcolm Edey's contention (in Dr. Edey's responses to the Acting Chair of the Senate 'Economics Reference Committee' on 1 June 2017) that a viable opportunity exists for Credit Cardholders that have managed to 'chalk up' considerable debit, often across several Credit Cards, to consolidate those debts in a zero or introductory low interest rate Credit Card to ".... pay off their loans more quickly"?
Because Credit Card Issuers that offer Balance Transfer Interest-Free Period Offers are not Benevolent Bankers, they seek to poach profitable Credit Cardholders from other Issuers evident in Balance Transfer Offers.

4

9th

Chair of APRA

APRA Chairman responded to a Senator Hearing in Canberra on 3 June 2017 "....the margins on credit card business look very high , certainly to any other form of credit, and certainly I can't sit here today with an explanation of why that is,"............ and ............ "Informing us all about that is probably a useful piece of work". 
What did APRA seek post 3 June 2017 to understand why Credit Card interest rates were so high, when the Cash Rate is at an all time low of 1.5%?

9

Governor of the Reserve Bank

Has the Governor of the Reserve Bank who is the Chair of the Council of Financial Regulators, and co-wrote LOAN RATE STICKINESS: THEORY AND EVIDENCE in June 1992, ever discussed with the other two members of that Council, namely APRA and ASIC, the RBA informing the Government, pursuant to section 11(1) of the Reserve Bank Act 1959, of the need for the RBA, pursuant to section 50 of the Banking Act 1959, to re-regulate a maximum interest rate for Purchases and for Cash Advances due to the burgeoning gap between the Overnight Cash Rate of 1.5% and interest rates charged on low interest and on high interest Credit Cards that peak at 29.49% for a Cash Advance using a Latitude Financial "Go MasterCard"?

9

11th

Royal
Commissioner

2

12th

Governor of the Reserve Bank

Is the Board of the Reserve Bank which is chartered 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" aware of the primary findings of the reports (published from 2005) from the Productivity Commission, the ABS and ASIC that classify and quantify the Financial Literacy Capacity of Australians that are ranked as low as less than Level 1 up to Level 5?
In particular that "For nearly half of the population were assessed at either levels 1 (the lowest level) or 2, both of which are below the minimum level deemed necessary to participate in a knowledge-based economy (level 3)."

3

12(a)th

Chair of APRA

Is the Chair of APRA, Wayne Byres, aware of the primary findings of the reports (published from 2005) from the Productivity Commission, the ABS and ASIC that classify and quantify the Financial Literacy Capacity of Australians that are ranked as low as less than Level 1 up to Level 5?
In particular that "For nearly half of the population were assessed at either levels 1 (the lowest level) or 2, both of which are below the minimum level deemed necessary to participate in a knowledge-based economy (level 3)."

5

Chair of ASIC

Will the Royal Commission ask the Chair of ASIC that is bound by Part 1-Preliminary Division 1 Objects of the ASIC Act 2001 to -

*      "receive, process and store, efficiently and quickly, information that is given to us",

to inform what action ASIC took to protect Financially Uneducated And Vulnerable Credit Cardholders that have poor Financial Literacy Capacity, after it published ASIC Report 224 "Access to financial advice in Australia" in Dec 2010?

5

14th

Chair of Council of Financial Regulators

Will the Chair of the Council of Financial Regulators provide to the Royal Commission a schedule of the respective responsibilities of the RBA, APRA and ASIC (and the clauses relied upon in their respective Acts listed at the top of this letter), that satisfy the 'Terms of Reference' and 'Statement of Expectations' required under the PGPA Act, that obligates each regulator to ensure competition amongst Credit Card Products which involves seeking information to establish that Credit Card Issuers are not engaging in Numeracy And Literacy Discrimination through Unconscionable Credit Card Advertising targeted at Credit Cardholders with low Numeracy and Literacy Skills?

5

15th

Governor of the Reserve Bank

Will the Governor of the Reserve Bank inform why its Payments System Board's 'Responsibilities and Powers webpage does not also list the Banking Act 1959 under legislation that governs the Payment Systems Board's responsibilities and powers?

1

16th

Chair of Council of Financial Regulators

Will the Chair of the Council of Financial Regulators inform if it sought financial data from the primary six  Credit Card Issuers (Four Pillars, Citibank and Latitude Financial nee G.E. Capital) that identifies the number, Outstanding Indebtedness and demography of Credit Cardholders that are Persistent Revolvers after the RBA quantified in Graph 7 of RBA Submission to the Senate Inquiry into Matters Relating to Credit Card Interest Rates - Aug 2015 the indebtedness borne by Persistent Revolvers?

3

17th

CEO of the ABA that issued the regulatory binding
Banking Code of Practice from 1 July 2019

Will the Royal Commission ask the CEO of the ABA -

*      if Example 1 - Unconscionable Conduct - St George Visa Card of the Nine Examples within Labyrinth of ‘Concealed Spiders’ constitutes Unconscionable Conduct (based in the ACCC's definition of Unconscionable Conduct).  AND
*      did St. George Bank by charging interest @ 20% from the date of each Purchase for the subsequent two months constitute an illegal penalty under the common law equitable penalty doctrine, because that interest charge was collateral to the main obligation (to pay the Closing Balance by the Payment Due Date) and the withdrawal of the Interest Free Period was intended to be in terrorem of the other party (the Cardholder).  It was intended to scare the Cardholder (Mr. McK_nn) into paying his Closing Balance on time and the 20% interest rate was a Usurious Interest Rate and therefore an unconscionable penalty because 20% from the date of each Purchase did not reflect the losses St. George Bank incurred as a result of the Cardholder's failure to pay the shortfall of $40 (2.06%) by the Payment Due Date, particularly as he was charged 20% on all his Purchases of $1,936.92, even though he had repaid 97.94% of his Closing Balance 10 days prior to the Payment Due Date.

==========================

(Example 1 notes that St George Credit Cardholder, Peter McK_nn, had a Closing Balance of $1,936.92 of his Visa Gold Credit Card and paid $1,896.92 (97.94%, of his Closing Balance) to St. George Bank on 22 May '14 (10 days prior to his monthly Payment Due Date) which was a shortfall of $40 on the Closing Balance of $1,936.92 of his Visa Gold Card.  Peter was charged interest @ 20% by St. George Bank on $1,936.92 (his total Purchases for the previous month) even though he had repaid 97.94% of his Closing Balance 10 days prior to the Payment Due Date.  He then forfeited his Interest Free Period for two subsequent months, whereby being charged @ 20% interest from the date of each Purchase.)

2

17(a)th

Chairman
of ACCC

Will the Royal Commission ask the Chairman of the ACCC, Mr. Rod Sims, to examine the information regarding advertisements for Credit Cards (explained in the Nine Examples within Labyrinth of ‘Concealed Spiders’), with particular regard to obligations under the National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Act 2011, to determine if any represent Predatory Advertising, ipso facto Unconscionable Conduct (based in the ACCC's description of Unconscionable Conduct)?

2

18th

Chairman
of ACCC

Will the Royal Commission ask the Chairman of the ACCC, Mr. Rod Sims, if the 'Conditions of use' booklets issued by St. George Bank, ANZ and Westpac (summarised in table in Chapter 1) and listed in 18th with text in small fonts on innumerable page constitute Unconscionable Conduct?

3

19th

Royal
Commissioner

Will the Royal Commission recommend to the Three Financial Services Regulators that they use their existing regulatory powers to require all Credit Card Issuers to simplify their Credit Card Products so that their Credit Cards  'Conditions of Use' booklet, together with any Schedule/s referred to therein, -

(a)       do not exceed 50 pages in text no smaller than Arial 10 font; and

(b)       the existing height and width of the booklet is retained?

4

20th

Royal
Commissioner

Does each of the Four Pillars reducing their low interest credit card by 5% circa amidst the prospect of a Royal \ Commission, evidence that the Four Pillars that issue 80% of Credit Cards used in Australia, were uncompetitive during the Council of Financial Regulators 'watch', when each of the RBA, ASIC and APRA have regulatory obligations to the Australian public to ensure real competition amongst Credit Card Issuers, in particular the RBA under Section 10(2) 'Functions of Reserve Bank Board' of Reserve Bank Act 1959 to "best contribute to.......... the economic prosperity and welfare of the people of Australia" and for the Payments Systems Board to always Act in the Public Interest?

5

21st

Royal
Commissioner

Will the Royal Commission recommend to the Three Financial Regulators that they use their existing regulatory powers to ban Reward Programs?

6

22nd

Royal
Commissioner 

2

23rd

Royal
Commissioner

Will the Royal Commission recommend to the Three Financial Regulators that they use their existing regulatory powers to ban any Credit Card Issuer offering Balance Transfer Interest Free or Very Low interest introductory offers which 'poach' profitable Financially Uneducated And Vulnerable other bank Credit Cardholders because Persistent Revolvers that Lack Financial Acumen contribute 80% circa of all Interest and Penalty Fees Revenue generated from Credit Card Products?

6

Royal
Commissioner

Will the Royal Commission ask the ASIC chairman, James Shipton, why ASIC made the following statement in ASIC's Submission to the Productivity Commission Inquiry into competition in the Australian financial system +- Sept 2017?

            "A senate inquiry submission by Treasury noted that in 2013 only 30% of surveyed users reported paying interest on their credit card balance.98 . Contrary to this self-reporting though, the share of balances attracting interest at the time was in fact closer to two-thirds.99"

1

25th

Royal
Commissioner

B.       certifies that Visa and MasterCard separately complied with the two weighted-average Interchange Fee benchmarks, including 'companion cards', during the relevant year, namely 0.50% for Credit Cards and 8 cents for Debit Cards?

4

26th

Chair of Reserve Bank Board of Directors

Will the Royal Commission ask the Board of Directors of RBA to declare their aggregate -

*        Annual Cardholder Fees paid; and

*        Interest Costs paid,

by the eight members in the 12 months to 30 June 2018 for enjoying the convenience of the Lines of Credit provided by their personal Credit Cards?

1

27th

Governor of the Reserve Bank

Will the Royal Commission ask the Governor of the Reserve Bank what investigations the Reserve Bank has undertaken with Credit Card Issuers, the three Credit Reporting Agencies, Financial Counsellors and Credit Card Distress Authorities to understand the number of Credit Cardholders that are experiencing Extreme Financial And Emotional Distress and the various financial quanta of that distress?

8

Governor of the Reserve Bank

Will the Royal Commission ask the Governor of the Reserve Bank what the Reserve Bank has done, and when it did it, to ensure that Credit Card Issuers do not issue further Credit Cards to applicants that are experiencing Extreme Financial And Emotional Distress due to already having been issued several Credit Cards?

2

Governor of the Reserve Bank

Will the Royal Commission ask the Reserve Bank to draw upon its existing Extensive Powers to establish a Standard for a 'Uniform Credit Evaluation Methodology' that all Credit Card Issuers must observe similar to NAB's Microenterprise Loans because too many Australian adults have obtained Credit Cards with excessive interest rates which would be lower if the payment defaults were lower due to a robust designated 'Uniform Credit Evaluation Methodology' that all Credit Card Issuers observed?

8

30th

Governor of the Reserve Bank

Will the Royal Commission recommend that the Reserve Bank set a new Standard, pursuant to Division 4, Section 18, that requires all Credit Card Issuers to issue a 'Provisional' Charge Card to any applicant under the age of 21 that has not previously held a Credit Card?  Any such applicant, predominantly school leavers, would need to repay the entire Closing Balance by the Payment Due Date for a minimum of three months, prior to being issued with a Credit Card?

2