The $83 billion mutual banking sector has taken aim at some of Australia‘s major banks calling for greater disclosure of the ownership of bank sub-brands.
In a letter to the Australian Securities & Investments Commission, CUA chief executive Chris Whitehead has raised concerns around the “illusion of independence and competition” created by bank marketing and advertising campaigns on behalf of their sub-brands, according to News Ltd reports.
“CUA considers that the holder of the operative Australian financial services licence should feature prominently in any advertising and not be buried in fine print,” Whitehead reportedly said in the letter.
“Consumers looking for an alternative to the listed banks should be able to be confident that they have found one.”
He has also called for clarification about claims under the government‘s $250,000 deposit guarantee.
He argued that consumers might overestimate the protection they will get if they have deposits adding up to more than $250,000 spread across various bank sub-brands. The Financial Claims Scheme would treat all of these deposits as belonging to one institution and deny these consumers protection beyond the $250,000 limit.
In a similar statement, bankmecu managing director Damien Walsh said there was “growing concern that the major banks are creating a veneer of competition through their various sub-brands.”
ANZ did not hold a stake in any sub-brand (in the deposit or lending market) at the time of writing.
“We have also asked the treasurer to require banks to prominently disclose ownership of their wholly owned subsidiary sub-brands in all advertising,” Walsh allegedly wrote.
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