Jones puts NAB at centre of 'corrupt' banking sector

Retired Sydney academic Evan Jones last week consolidated a thesis on the Australian banking sector for the title Independent Australia.

Banking, Jones wrote, "is dominated by corrupt organisations that also run banks on the side, supported by a craven, supplicant media and political establishment."

NAB, he said, "is a corrupt organisation. It also runs a bank on the side. But running a bank is an essential vehicle for the former - possessing a banking license gives one carte blanche to engage in corrupt practices.

"The NAB has concurrently been exposed, through its British Clydesdale subsidiary, as imposing on small business and farmer borrowers unconscionably constructed loan facilities."

NAB did not respond to a Banking Day request for a comment on an elaborate attack on its ethics by Jones, a retired political economy academic from Sydney University.
NAB, Jones contends, "has been engaging in unconscionable or fraudulent practices against its SME/farmer customers since at least the mid-1980s."

Commonwealth Bank is also in Jones' frame.

"If the NAB is the most consistent malpractitioner, the CBA joins it at the top of the list with intermittent large-scale scams — from the 1980s foreign currency loan imbroglio, to underpinning the Storm Financial managed investment scam and directing the unconscionable foreclosure of hundreds of Bankwest customers after its purchase of Bankwest from HBOS in late 2008," he wrote.

Jones outlined his take on the relevant internal bank practices.

"The proximate cause of the scale of investment advisee and SME/farmer casualties is the asymmetry of the bank lender/adviser-customer relationship," Jones wrote.

"In the former case, the asymmetry is leveraged on the ignorance, naiveté and susceptibility of the would-be retail investor.

"In the latter case, the asymmetry is centred on a medium to long-term relationship forged on loan facilities (perennially not fit for purpose) that give the lender near total discretion over the terms of the relationship.

"In both cases, the asymmetry is enhanced by the fact that customers come to a bank expecting professionalism but are confronted by personnel of a quite different character.

"The loosening of standards began as early as the late 1960s, continuing during the 1970s."

"So how does it now work in the neglected SME/farmer domain?

"A bank will, at its discretion, default a borrower. It calls on a coterie of partners in the enterprise, all corrupted on the drip of bank largesse. Enter the panelled law firms, the valuers, the receivers, selected real estate agents.

"All customer assets (including the family home) will have been taken as security, possibly also family assets via guarantees. The defaulted borrower will face litigation penniless. The bank will seek summary judgment for appropriation of customer assets, denying a hearing for borrower counter-claims.

"The defaulted customer will face a court not sympathetic to her/his claims, courtesy of an impoverished legal culture rooted in the law of contract, and a judiciary imbued with calculated ignorance and/or complicity with bank lender interests.

"It is not improbable that the bank will sell borrower assets under value, manufacture a residual borrower debt, pursue the borrower to bankruptcy and thus ensure that the borrower is denied access to the courts for any counter-claim. The bank will then claim the manufactured bad debt write-off as a tax deduction."