NAB bans introducer payments as Canberra grilling keeps heat on banks

The Hayne report continues to make waves with NAB banning introducer payments ahead of a parliamentary grilling.

Andrew Thorburn, Group Chief Executive Officer of NAB appearing at a House of Representatives Standing Committee on Economics at Parliament House in Canberra. Picture Kym Smith

There is nothing like a visit to Canberra to help the big banks get their house in order.

Today it was NAB banning its controversial introducer payments to encourage new mortgage loans and last week it was ANZ formally ending commission payments for branch staff.

Both practices attracted the ire of Hayne’s royal commission and with ANZ and NAB scheduled to appear before the House Economics Committee on Wednesday what better time to make some politically correct changes.

Both practices fell under the problem of the bank potentially encouraging customers to take products they weren’t suited to which may get them into trouble.

Far better to have bank tellers on higher base pay than variable pay based on sales.

NAB would hope everyone who has dealt with it would recommend its services but that being the case there was no need to actually give these people a payment to thank them for the referral.

Both ANZ’s Shayne Elliott and NAB’s Phil Chronican would say the moves were going to happen and the Parliamentary hearings were coincidental.

But for whatever reasons its good the banks are coming to their senses.

NAB is committed to 72 of the recommendations with mortgage broker commissions the main exclusion at this stage.

This is because the Federal Government has backflipped on its support for the commission’s call to end trailing commissions.

Treasurer Josh Frydenberg claims the move was all about bank competition which is a nonsense.

He showed his colours last week by rejecting recommendations to stop self-managed super funds borrowing for property.

Frydenberg doesn’t want to upset the retiree sector heading into an election so, once again, rational policy has taken a backward step in the chase for votes.