Bankwest scab festers
Supporters of Bankwest borrowers aggrieved by Commonwealth Bank's management of business loans of the bank continue to find a parliamentary voice.On Tuesday night , Alan Eggleston, a Liberal senator for Western Australia, alleged that "CBA misused the provisions within their credit contracts for non-monetary defaults," leaving the borrowers "confused by Bankwest calling in their loans and putting them into receivership when the market value of their properties had not reduced."Eggleston, using research provided by activists affected by Bankwest's conduct, asserted CBA " improperly and aggressively impaired loans which would not have otherwise been impaired by Bankwest" with the incentive of "meeting its Basel requirements."This is a long-running dispute between business borrowers and CBA over the latter's vigorous review of loans following its takeover of Bankwest in late 2008.A Senate committee inquiry ventilated many of the issues but brought little insight and no redress for the unhappy customers.Reviving an old meme - and one contested by CBA - Eggleston told the Senate: "There was in fact a clawback price reduction mechanism.""The clawback was not in the form of money being returned to CBA; rather, it was in the form of a A$302 million offset against $328 million withheld funds from the purchase consideration of $2.428 billion."Eggleston went on to claim that under the "Basel Accord … it was very much in CBA's interests to … impair otherwise viable loans.""It has been brought to my attention that CBA's motivations for aggressively manufacturing defaults on customers may lie in the Basel accord framework," he said. " … It was announced by the Commonwealth Bank during the 2008 period that the bank had progressed to the Basel II advanced approach accreditation and was also applying for a US Federal Reserve holding status, both of which require a greater capital burden."He did not reveal the source for his research, but it is clear the Brisbane-based stirrer Michael Fraser, who trades as The Arbitrator, was an intermediary.Through a media adviser, CBA said: "The issues raised last night by Senator Eggleston have been tabled, and responded to by the Bank, on numerous occasions including as part of a Senate Inquiry, and a number of legal proceedings. ""Commonwealth Bank, Group General Counsel, David Cohen has also addressed these issues in a letter to the Senate Economics Legislation Committee."None of these allegations have ever been substantiated and the Bank now considers this matter closed."