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This is a Bill, not an Act. For current law, see the Acts databases.
2016
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Banking Commission of Inquiry Bill
2016
No. , 2016
(Mr Katter)
A Bill for an Act to establish a commission of
inquiry into banking in Australia with the powers
of a Royal Commission, and for related purposes
No. , 2016
Banking Commission of Inquiry Bill 2016
i
Contents
Part 1--Preliminary
1
1
Short title ........................................................................................... 1
2
Commencement ................................................................................. 2
3
Simplified outline of this Act ............................................................ 2
4
Definitions ......................................................................................... 3
Part 2--Establishing the Banking Commission of Inquiry
4
5
Banking Commission of Inquiry is established ................................. 4
6
Terms of reference ............................................................................. 4
Part 3--Powers of the Banking Commission of Inquiry
7
7
Hearings ............................................................................................ 7
8
Commission not bound by the rules of evidence ............................... 7
9
Application of the Royal Commissions Act 1902 ............................... 7
10
Application of Commonwealth laws ................................................. 8
Part 4--Other matters
9
11
Departmental officers ........................................................................ 9
No. , 2016
Banking Commission of Inquiry Bill 2016
1
A Bill for an Act to establish a commission of
1
inquiry into banking in Australia with the powers
2
of a Royal Commission, and for related purposes
3
The Parliament of Australia enacts:
4
Part 1--Preliminary
5
1 Short title
6
This Act is the Banking Commission of Inquiry Act 2016.
7
Part 1 Preliminary
Section 2
2
Banking Commission of Inquiry Bill 2016
No. , 2016
2 Commencement
1
(1) Each provision of this Act specified in column 1 of the table
2
commences, or is taken to have commenced, in accordance with
3
column 2 of the table. Any other statement in column 2 has effect
4
according to its terms.
5
6
Commencement information
Column 1
Column 2
Column 3
Provisions
Commencement
Date/Details
1. Sections 1 and
2 and anything in
this Act not
elsewhere covered
by this table
The day after the Governor-General in
Council assents to this Act.
2. Sections 3 to
11
The provisions commence on the day the
Consolidated Revenue Fund is appropriated
under an Act to the Treasury to fund the
Banking Commission of Inquiry.
Note:
This table relates only to the provisions of this Act as originally
7
enacted. It will not be amended to deal with any later amendments of
8
this Act.
9
(2) Any information in column 3 of the table is not part of this Act.
10
Information may be inserted in this column, or information in it
11
may be edited, in any published version of this Act.
12
3 Simplified outline of this Act
13
This Act requires the Treasurer to establish a Banking Commission
14
of Inquiry within 6 weeks after the Governor-General in Council
15
assents to this Act.
16
The Banking Commission of Inquiry has the same powers as a
17
Royal Commission.
18
Preliminary Part 1
Section 4
No. , 2016
Banking Commission of Inquiry Bill 2016
3
4 Definitions
1
In this Act:
2
ADI means an authorised deposit-taking institution within the
3
meaning of the Banking Act 1959.
4
cash rate means the market interest rate on overnight funds.
5
Part 2 Establishing the Banking Commission of Inquiry
Section 5
4
Banking Commission of Inquiry Bill 2016
No. , 2016
Part 2--Establishing the Banking Commission of
1
Inquiry
2
5 Banking Commission of Inquiry is established
3
(1) The Treasurer must, within 6 weeks after the Governor-General in
4
Council assents to this Act, appoint persons to:
5
(a) conduct an inquiry into the matters specified in section 6; and
6
(b) report to the Treasurer on the matters (including any
7
recommendations relating to the matters) within 6 months
8
after the Governor-General in Council assents to this Act.
9
(2) The appointment must be by notifiable instrument.
10
(3) The appointment takes effect on the day after the instrument of
11
appointment is made.
12
(4) The Commission's report is not a legislative instrument.
13
(5) The members of the Commission have the privileges of members
14
of the House of Representatives.
15
6 Terms of reference
16
The matters into which the Commission must inquire are:
17
(a) whether ADIs have benefited (through profits or otherwise)
18
from not passing on in full cuts to the cash rate to home loan
19
borrowers; and
20
(b) whether there are any mechanisms, legislative or otherwise,
21
that could be used to limit ADIs' margins on lending where
22
those margins are excessive, and the benefits and risks of
23
using those mechanisms; and
24
(c) the extent to which ADIs are entering into loans under which
25
the ADI may recover more than the value of the secured
26
property; and
27
(d) whether there are any mechanisms, legislative or otherwise,
28
that could be used to ensure that ADIs cannot recover more
29
Establishing the Banking Commission of Inquiry Part 2
Section 6
No. , 2016
Banking Commission of Inquiry Bill 2016
5
than the value of the secured property under a loan, and the
1
benefits and risks of using those mechanisms; and
2
(e) the extent to which ADIs are making loans that the borrower
3
could not reasonably be expected to service; and
4
(f) whether there are any mechanisms, legislative or otherwise,
5
that could be used to ensure that ADIs do not make loans that
6
the borrower could not reasonably be expected to service,
7
and the benefits and risks of using those mechanisms; and
8
(g) the extent to which ADIs are, by assignment of rights or
9
otherwise, passing to another entity the ADIs rights under
10
loan agreements; and
11
(h) whether Australian law is being complied with by ADIs in
12
passing to another entity rights under loan agreements; and
13
(i) whether there are any mechanisms, legislative or otherwise,
14
that could be used to ensure that ADIs do not, by assignment
15
or otherwise, pass to another entity the ADIs' rights under
16
loan agreements, without banking tribunal oversight and/or
17
mortgagor's approval, and the benefits and risks of using
18
those mechanisms; and
19
(j) whether the remuneration packages received by directors and
20
senior managers of ADIs are structured so as to ensure that
21
the ADI not only generates profits to shareholders, but also
22
behaves responsibly and fairly in relation to the customers of
23
the ADI and the broader Australian economy and
24
community; and
25
(k) whether the remuneration packages received by directors and
26
senior managers of ADIs are:
27
(i) proportionate to the benefits generated by the ADI, not
28
only for shareholders of the ADI but also for customers
29
of the ADI and the broader Australian economy and
30
community; and
31
(ii) structured so that only genuine competency in managing
32
the ADI is rewarded; and
33
(iii) proportionate to the competencies demonstrated by the
34
relevant directors or senior managers in managing the
35
ADI; and
36
(iv) proportionate to the remuneration packages of the wider
37
Australian community; and
38
Part 2 Establishing the Banking Commission of Inquiry
Section 6
6
Banking Commission of Inquiry Bill 2016
No. , 2016
(l) the issue of legislative adoption of non-recourse lending; and
1
(m) the issue of legislative regulation of mortgage insurance; and
2
(n) the establishment of a tribunal with the powers needed,
3
including injunctive powers, to:
4
(i) oversight and ensure prudential and responsible
5
behaviour by ADIs and their directors, senior managers
6
and staff; and
7
(ii) provide Legal Aid to parties injured (or potentially
8
injured) by contracts that reflect inequitable powers, and
9
deliver discretionary powers to ADIs breaking statute,
10
equity and common law.
11
Powers of the Banking Commission of Inquiry Part 3
Section 7
No. , 2016
Banking Commission of Inquiry Bill 2016
7
Part 3--Powers of the Banking Commission of
1
Inquiry
2
7 Hearings
3
(1) The Commission may hold hearings.
4
(2) The hearings may be held at such places as the Commission
5
determines.
6
(3) Subject to this Act, the procedure at a hearing is to be such as the
7
Commission determines.
8
8 Commission not bound by the rules of evidence
9
The Commission is not bound by the rules of evidence and may
10
inform itself on any matter in such manner as it thinks fit.
11
9 Application of the Royal Commissions Act 1902
12
(1) Subject to this section, the Royal Commissions Act 1902 applies in
13
relation to the Banking Commission of Inquiry, and to the
14
Commissioners conducting it, as if:
15
(a) the Banking Commission of Inquiry were a Royal
16
Commission; and
17
(b) each Commissioner were a member of a Royal Commission.
18
(2) The regulations may, for the purposes of the application of
19
section 9 of the Royal Commissions Act 1902 in accordance with
20
subsection (1) of this section, provide for or specify matters of the
21
kind referred to in subsection 9(2) of that Act.
22
(3) Section 9 of the Royal Commissions Act 1902, in its application in
23
accordance with subsection (1) of this section, has effect as if those
24
regulations were regulations made for the purposes of
25
subsection 9(2) of that Act.
26
(4) Sections 10 and 15 of the Royal Commissions Act 1902, in their
27
application in accordance with subsection (1) of this section, have
28
Part 3 Powers of the Banking Commission of Inquiry
Section 10
8
Banking Commission of Inquiry Bill 2016
No. , 2016
effect as if references in those sections to offences against that Act
1
included references to such offences as apply in accordance with
2
subsection (1) of this section.
3
10 Application of Commonwealth laws
4
The law of the Commonwealth (including the general law) applies
5
in the same way to the Banking Commission of Inquiry as it would
6
apply to a Royal Commission.
7
Other matters Part 4
Section 11
No. , 2016
Banking Commission of Inquiry Bill 2016
9
Part 4--Other matters
1
11 Departmental officers
2
(1) The Secretary of the Treasury may enter into an arrangement with
3
the Commission of the Banking Commission of Inquiry to make
4
APS employees in the Treasury available, for a period not
5
exceeding the duration of the Banking Commission of Inquiry, to
6
assist with the conduct of the Banking Commission of Inquiry.
7
(2) In performing functions and exercising powers to the extent
8
reasonably necessary to assist with the conduct of the Banking
9
Commission of Inquiry, an APS employee made available under
10
such an arrangement:
11
(a) is subject to the directions of the Commission; and
12
(b) is not subject to the directions of the Secretary or the
13
Treasurer.
14