Details of Senator Barry O'Sullivan's vision for a commission of inquiry into Australian banks were unveiled yesterday, with copies of his draft bill distributed to industry stakeholders and consumer advocates across the country.O'Sullivan's terms of reference for the inquiry are potentially controversial for Labor and crossbench MPs.Under the government backbencher's proposal, the inquiry could elect to skirt any matters currently before the courts and others under investigation by government regulators and law enforcement agencies.That might curtail the inquiry's ambit considerably and might rule out evidence from known victims of poor financial advice whose grievances are still subject to legal action or formal investigations.Weaknesses in anti-money laundering compliance at several banks might also be a no-go zone for the commission of inquiry because of legal actions and ongoing investigations initiated by Austrac.Governance failures within the Reserve Bank's note-printing operation might also escape scrutiny because several matters relating to that controversy are due to be heard in the Federal Court in 2018.The emphasis of O'Sullivan's proposed inquiry seems to be on uncovering new cases of misconduct within the financial services industry and providing safeguards for whistle-blowers working in the financial services sector wanting to testify in hearings.Another controversial aspect of O'Sullivan's proposal is that people employed by key regulators such as APRA and the Reserve Bank will not be afforded explicit protection under the whistle-blower provisions.Lower house crossbenchers who have been vocal about the banking industry's shortcomings, such as Tasmanian MP Andrew Wilkie and Queensland maverick Bob Katter, might seek amendments to extend the whistle-blower protections.The need for such protections was underlined in the last high-powered interrogation of the financial services sector - the HIH Royal Commission in 2003 - which evolved into an examination of APRA's modus operandi as the regulator of general insurers.The fallout from the HIH inquiry and the more recent allegations of criminal misconduct within the Reserve Bank's note-printing business suggest that the commission of inquiry's work might be severely curtailed if agency staff are not given whistle-blower protection.It is also surprising that O'Sullivan's bill doesn't include these protections given that the commission will be asked to investigate whether regulators have been effective at deterring unethical or unlawful conduct with financial institutions.O'Sullivan is also asking the commission to examine the best method for administering the Code of Banking Practice and whether it should be included in an enforceable regime covering the banks and other deposit takers. O'Sullivan's inquiry would be overseen by three commissioners- an experienced judge sitting as the presiding member, an expert from the financial services industry and a community representative.Banking Day has been told that lower house MPs have already begun sounding out the interest of potential appointees to the inquiry.High profile Baptist minister and social rights campaigner, Rev. Tim Costello, confirmed to Banking Day last week that crossbench politicians had approached him.Crossbench politicians and Labor frontbenchers yesterday declined to comment on the specifics of O'Sullivan's bill.Labor's shadow spokesperson on financial services Katy Gallagher said the Opposition would consider all proposals to establish an inquiry