Banks will face questioning over their car loan programs in the second week of hearings for the Royal Commission into banking misconduct, which begin on Monday.
ANZ has announced it will suspend its retail asset financing loans – which are used for cars, boats and caravans – while an internal review is underway.
Meanwhile the new CEO of Commonwealth Bank has warned staff of a difficult week ahead at the Royal Commission in an internal staff memo, reported in the Australian Financial Review.
“There will be cases highlighted next week where customers have been treated unfairly by us,” Mr Comyn reportedly told staff.
“In many cases, our actions have had a significant impact on the financial and emotional well-being of our customers. This is unacceptable,” he wrote.
“Where we have made mistakes we must and will take responsibility for them, we will make things right for our customers, and not repeat the same mistakes.”
The Commonwealth bank was grilled over its use of commission structures that rewarded mortgage brokers for convincing consumers to take on high-value loans.
ANZ's decision to give a $50,000 loan to a pensioner who fell victim to a scam and cannot afford the repayments will be further scrutinised this week.
Pensioner Robert Regan took out the loan thinking he was helping a British woman bring gold to Australia, but instead he ended up getting scammed and was left with loan repayments so big he's relying on food parcels to survive.
The 72-year-old used a mortgage broker to take out an ANZ loan last year, using his home as security.
He told the banking royal commission on Friday that income and expenditure figures used by his broker to get the loan approved were wrong.
He said he rejected Thursday's offer from ANZ that included a goodwill credit of $1500, reduced minimum monthly repayments of $150 until the loan was repaid and that he immediately pay off the full amount if he sold his home.
An ANZ executive is expected to respond to Mr Regan's case when the royal commission's public hearing continues in Melbourne on Monday.
Mr Regan is one of a handful of consumers due to testify during the two-week hearing into inappropriate or unsuitable lending for mortgages, cars and credit cards.
Monday's witnesses are expected to include a consumer who purchased unsuitable add-on credit card insurance.
Add-on insurance products are designed to protect people if they become unable to meet repayments but consumer groups label them junk insurance that often provides little or no benefit.
- with AAP
