CBA faces legal action for money laundering breaches

CBA faces legal action for money laundering breaches

Commonwealth Bank has been accused of more than 53,000 financial violations by Australia’s financial intelligence and regulatory agency.

AUSTRAC has initiated civil penalty proceedings in the Federal Court against Commonwealth Bank “for serious and systemic non-compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act)”.

AUSTRAC’s action alleges over 53,700 contraventions of the AML/CTF Act.

This follows an investigation by AUSTRAC into Commonwealth Bank’s compliance, particularly regarding its use of intelligent deposit machines.

According to AUSTRAC, Commonwealth Bank did not carry out any assessment of the money laundering and terrorism financing risk of these machines before their rollout in 2012.

This assessment allegedly did not start until mid-2015 – three years after the machines were introduced.

“For a period of three years, CBA did not comply with the requirements of its AML/CTF program relating to monitoring transactions on 778,370 accounts,” AUSTRAC said.

“We want to emphasise our commitment to work with AUSTRAC and law enforcement agencies to fight money laundering and counter terrorism financing.

“We would never deliberately undertake action that enables any form of crime.

“To that end, we scan billions of dollars of transactions daily, and report 4 million transactions a year to AUSTRAC. We are currently reviewing AUSTRAC’s claim and will file a statement of defence in this matter.”

The regulator also said that Commonwealth Bank failed to give 53,506 threshold transaction reports to AUSTRAC on time.

These were for cash transactions of $10,000 or more through intelligent deposit machines from November 2012 to September 2015.

AUSTRAC said these late threshold transaction reports had a total value of about $624.7 million.

They represented about 95 per cent of the threshold transactions that occurred through the bank’s intelligent deposit machines from November 2012 to September 2015.

AUSTRAC also accused Commonwealth Bank of failing to report suspicious matters either on time or at all involving transactions totalling over $77 million.

The regulator said that even after Commonwealth Bank became aware of suspected money laundering or structuring, it did not monitor its customers to mitigate and manage the risk of money laundering and terrorism financing.

Regulator sends a message

AUSTRAC’s acting chief executive, Peter Clark, said this legal action should send a clear message to all reporting entities about the importance of meeting AML/CTF obligations.

“By failing to have sound AML/CTF systems and controls in place, businesses are at risk of being misused for criminal purposes,” he said.

“AUSTRAC’s goal is to have a financial sector that is vigilant and capable of responding, including through innovation, to threats of criminal exploitation.”

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Does Westpac offer loan maternity leave options?

Having a baby or planning for one can bring about a lot of changes in your life, including to the hip pocket. You may need to re-do the budget to make sure you can afford the upcoming expenses, especially if one partner is taking parental leave to look after the little one. 

Some families find it difficult to meet their home loan repayment obligations during this period. Flexible options, such as the Westpac home loan maternity leave offerings, have been put together to help reduce the pressure of repayments during parental leave.

Westpac offers a couple of choices, depending on your circumstances:

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When applying for a home loan while pregnant, Westpac has said it will recognise paid maternity leave and back-to-work salaries. All you need is a letter from your employer verifying your return-to-work date and the nature of your employment. Your partner’s income, government entitlements, savings and investments will may help your application.

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While many lenders consider casual employees as high-risk borrowers because of their fluctuating incomes, there are a few specialist lenders, such as NAB, which may provide home loans to individuals employed on a casual basis. A NAB home loan for casual employment is essentially a low doc home loan specifically designed to help casually employed individuals who may be unable to provide standard financial documents. However, since such loans are deemed high risk compared to regular home loans, you could be charged higher rates and receive lower maximum LVRs (Loan to Value Ratio, which is the loan amount you can borrow against the value of the property).

While applying for a home loan as a casual employee, you will likely be asked to demonstrate that you've been working steadily and might need to provide group certificates for the last two years. It is at the lender’s discretion to pick either of the two group certificates and consider that to be your income. If you’ve not had the same job for several years, providing proof of income could be a bit of a challenge for you. In this scenario, some lenders may rely on your year to date (YTD) income, and instead calculate your yearly income from that.

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Please note, however, that a pre-approval is nothing more than an idea of your ability to borrow funds and is not the final approval. You should receive the home loan approval  only after finalising the property and submitting a formal loan application to the lender, ING. Additionally, a pre-approval does not stay valid indefinitely, since your financial circumstances and the home loan market could change overnight.

 

 

Can I apply for an ANZ non-resident home loan? 

You may be eligible to apply for an ANZ non-resident home loan only if you meet the following two conditions:

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Remaining loan term

The length of time it will take to pay off your current home loan, based on the currently-entered mortgage balance, monthly repayment and interest rate.

How long does Bankwest take to approve home loans?

Full approval for a home loan usually involves a property valuation, which, Bankwest suggests, can take “a week or two”. As a result, getting your home loan approved may take longer. However, you may get full approval within this time if you applied for and received conditional approval, sometimes called a pre-approval, from Bankwest before finalising the home you want to buy.  

Another way of speeding up approvals can be by completing, signing, and submitting your home loan application digitally. Essentially, you give the bank or your mortgage broker a copy of your home’s sale contract and then complete the rest of the steps online. Bankwest has claimed this cuts the approval time to less than four days, although this may only happen if your income and credit history can be verified easily, or if your home’s valuation doesn’t take time.

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Preparing a financial summary, which lists all your income sources as well as significant expenses, can also help determine how much you can afford to borrow. You may also want to check your credit score before applying for pre-approval.

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Does Australia have no cost refinancing?

No Cost Refinancing is an option available in the US where the lender or broker covers your switching costs, such as appraisal fees and settlement costs. Unfortunately, no cost refinancing isn’t available in Australia.

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Sometimes lenders pass on the cut in full, sometimes they partially pass on the cut, sometimes they don’t at all. When they don’t, they often defend the decision by saying they need to balance the needs of their shareholders with the needs of their borrowers. 

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