ME's Jamie McPhee
Steering questions off to notice, with plenty of ‘I’m not sure’ and a bit of ‘you’ll have to ask them’, ME’s Jamie McPhee got the better of the House Economics committee yesterday.
Labor’s Andrew Leigh had little to do and if the LNP’s agents of undermining industry superannuation are any indicator, the sector can sleep a little easier.
The most disruptive shift in Australian finance in a generation is on the near horizon for some.
Detonating compulsory superannuation and smashing the industry superannuation model to pieces is the objective of the Tim Wilson cabal - Wilson being the committee chair whose cynical hearings on dividends as income played their part in running the ALP’s Bill Shorten off the rails.
Appearing before the committee, McPhee was free to play a restrained bat, with the conservatism buying time for the bank’s board.
Adelaide-trained McPhee conceded the bank took five years to shove legacy IT systems into the Temenos platform that plays a role in the bruising the bank’s taken these last few weeks.
It’s a classic case of the compliance and governance frenzy that is distracting boards and the acidic twist of narrow, defensive, commercial legal advice.
The ME board were in on the act, fabricated it. The arrival of the removal of remaining legacy systems for handling home loans and mortgages was news the ME board wanted to hear.
Connived out of nothing 25 years ago and with help from National Mutual, later Axa, Members Equity Bank spun itself around the hub that was and is Super Members Home Loans.
SMHL, run out of NatMut, was a sharp 1990s shop and important in the kindergarten years of mortgage-backed financing in Australia.
Briefed on the technicalities of the trusts defining a van-load of aged RMBS liabilities and the allocation of cash flows, the risk was that the modern, uniform mortgage redraw policy of ME did not sit well with the legacy thinking in these trusts, flowing into other metrics.
The board reviewed things five months ago and the absolute worst advice prevailed.
The word on the street is that McPhee fought his corner and for the bank's reputation, but what longevity will he have in the job? Wasn’t he leaving soon anyway?