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CBA slammed for handing meaningless spreadsheets to royal commission

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The Commonwealth Bank has been lashed for handing up first an incomplete submission to the royal banking commission, and then flooding the commission's offices with meaningless spreadsheets.

Australia's largest bank was also forced to admit there were 17 examples of misconduct or conduct falling below community standards in its wholly owned mortgage broker Aussie Home Loans, despite initially telling the commission there were no cases of misconduct within that business.

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Several Aussie Home Loan brokers have been subject to regulatory action by the Australian Securities and Investments Commission in recent years for alleged ‘liar loans’ - loans underpinned by falsified customer information.

Rowena Orr, QC, the counsel assisting the royal commission, levelled criticism against CBA after revealing it was one of the banks forced to redo their submissions to the royal commission.

“CBA’s submission was high level and used a general approach. It did not disclose the totality of the conduct that constitutes misconduct, or conduct that falls below community expectations,” Ms Orr told the royal commission.

CBA and 40 other financial institutions were asked to hand up a 50-page submission on all examples of misconduct or conduct falling below community standards in their businesses over the past 10 years. However, some banks were asked to resubmit after they produced documents that were light on detail.

Ms Orr said CBA’s second submission was also not up to scratch.

“CBA’s submission was not in a form that made it possible to understand the type and the scale of the misconduct,” Ms Orr said.

She said CBA had handed up large volumes of spreadsheets, which included large lists of all logged incidents that included an actual, suspected or likely breach.

“The volume of the material provided made it very difficult to assess the level of misconduct,” she said.

Lack of 'comprehensive information'

Mr Orr said NAB had also “failed to provide comprehensive information” in some areas, but the bank had detailed several instances of misconduct particularly in relation to its home loan introducer program.

NAB’s home loan ‘introducer program’, which rewarded people for referring home loan clients, is the first area under the royal commission's microscope. Two senior NAB executives will be called to give evidence on Tuesday.

Ms Orr said that overnight Westpac had identified further examples of potential misconduct that were not included in its first two statements.

“Late last week it (Westpac) informed the royal commission that it did not take account of some categories of data. Westpac has additional material it will be producing.”

ANZ neither came in for praise or criticism from Ms Orr, who detailed that ANZ’s submission listed 58 instances where its staff had engaged in misconduct or conduct that had fallen below community expectations.