Australian authorities will probe its largest banks over concerns about mortgage pricing practices after failing to fully pass on the savings from the latest central bank rate cuts to its customers.
The national government has mandated the Australian Competition and Consumer Commission (ACCC) to conduct the inquiry which will focus on how mortgages are priced, interest rate differences of existing and new clients and barriers to shifting between banks.
«The banks have left themselves open to the charge that they are putting their profits before their customers,» said Australian Treasurer Josh Frydenberg in «Daily Telegraph» (behind paywall) statement, highlighting that the nation’s big four banks (ANZ, CBA, NAB and Westpac) only passed on an average of 57 of the central bank’s latest 75 basis point interest rate cut to its customers.
Aussies Don’t Appreciate It!
«Australians rightly expect that when they purchase the biggest asset of their life that lenders will compete vigorously and fairly, enabling them to secure the best possible deal,» Frydenberg wrote.
«What they do not expect, nor appreciate, is when the big banks capitalize on their market dominance and their customers’ loyalty and refuse to pass on in full rate cuts.»
Previously, another ACCC mortgage inquiry concluded that the major banks were less concerned about competition than they were in maintaining mutually beneficial pricing levels.
