Given the litany of corporate misbehaviour and illegal activity exposed by the Hayne banking royal commission, it is hard to imagine the banks as arbiters of moral behaviour. But that is what’s revealed in submissions to the independent review of the Australian banking code of practice.
The triennial review by Mike Callaghan has been told that business banking and other financial services, including merchant facilities, are systematically denied to lawfully operating industries such as adult entertainment, the legal sex industry, gambling, medical marijuana and firearms.
The current banking code chapter on accessibility and inclusivity lists protection against discrimination for vulnerable groups, including the elderly, Indigenous, disabled, migrant and LGBTIQ communities. However, it does not include protection for small businesses, and sex workers and others in the adult industry are officially classified by the ATO, banks and the code not as vulnerable individuals but as small business operators.
As a result they can be, and often are, routinely denied basic business and personal bank accounts, debit cards, EFTPOS and credit card merchant facilities, business and personal loans, and mortgages on property where the business is located.
Discrimination and shaky reasoning
The financial and economic impact is significant. In fact, the submission from lobby group Sex Work Law Reform Victoria (SWLRV) to the review indicates that in any given year there are about 23,000 individual sex workers in Australia. And the Australian small business and family enterprise ombudsman has reported there are about 1000 sex industry and adult industry businesses employing a further 25,000 people, and that sex industry businesses are estimated to generate an annual turnover of $2.6 billion.
SWLRV has recommended to the review that small business customers be added to the accessibility and inclusivity list which explicitly protects groups against discrimination.
While discrimination against small businesses is not listed as a key issue in Callaghan’s interim report (published this month), it is clearly reflected in written submissions published on the review’s website.
Of the 37 submissions posted, 11 specifically address financial discrimination, including two from organisations representing shooters and firearms dealers, and seven from individuals and organisations associated with legal sex work or adult entertainment.
The submissions indicate that refusal to provide services to the sex industry by ABA’s member banks appears to be widespread. Australia’s leading adult industry association, the Eros Association, conducted a survey of 24 industry businesses which had experienced financial discrimination. It reported that 23 had experienced financial discrimination more than once, and that small, medium and large banks all engaged in financial discrimination, including the big four (NAB, ANZ, CBA, and Westpac).
Similarly, as part of an investigation into banking discrimination, Sex Work Law Reform Victoria contacted all 22 of the ABA’s member banks. None were willing to discuss, admit to or explain their practice of refusing services, except for NAB, which acknowledged its refusal to provide services to lawfully operating brothels and escort agencies (the refusal does not extend to individual sex workers). NAB said: “NAB no longer banks brothels and escort agencies due to different laws and licensing requirements across states and territories. This is a risk-based decision we have made to ensure we meet legislative requirements under the anti-money laundering and modern slavery laws.”
This is somewhat ironic given that last year Westpac agreed to pay the largest fine in Australian corporate history, a $1.3 billion civil penalty for more than 23 million breaches of anti-money laundering laws, including several thousand reportedly linked to offshore child-sex exploitation.
Walking a fine line
That fine surpassed the previous highest penalty in Australia, which was the Commonwealth Bank’s $700 million fine in 2018, also for money laundering reporting breaches after its ATM network was discovered to have been exploited by criminal syndicates trafficking drugs.
By contrast, SWLRV says it has been unable to find any evidence from either the Australian Institute of Criminology or AUSTRAC that the lawful sex industry is a high-risk industry susceptible to money laundering.
Given NAB’s explanation, perhaps the banks should refuse financial facilities to Crown, which was fined $1 million this year for failing to comply with regulations around junket operations, which the Bergin report found were connected to criminal influence and could have been used for money laundering.
Last year was a bumper period for fines imposed on Australian banks for corporate misbehaviour. That included NAB’s $57.5 million fine for charging superannuation customers fees for services that were never provided, and the same bank’s $15 million fine for operating an unlicensed loan referral scheme known as the “introducer program”.
Other big fines handed out to Australian banks in 2020 included the $10 million fine paid by ANZ for unfair transaction and dishonour fees and the $5 million fine paid by CBA for a promoting a package of discounts for farmers that was never activated.
An ongoing issue
And bank misbehaviour continues. It was reported just last week that CBA would plead guilty to selling questionable insurance to credit card and home loan customers, and ME Bank has been charged with making false and misleading claims to home loan customers.
In 2019 the small business and family enterprise ombudsman Kate Carnell released a statement highlighting the prevalence of financial discrimination experienced by sex workers and adult industry businesses.
“My office is continuously contacted by sex workers who have complained they have been denied banking services such as merchant facilities to allow them to conduct their business,” she said.
“There aren’t too many Australians who would rely on banks to be the moral arbiter for society.”
She is right, and that won’t change while the banking code of practice permits banks to systematically discriminate against a range of small businesses
The review is scheduled to complete its final report and recommendations by the end of November.
I am not going to waste my time responding to this article beyond saying that nothing of any significance in this iniquitous finance industry will change in any meaningful way at all, until we have a genuine democratic socialist government and the banks (amongst many other industries and areas of the economy) are nationalized. And of course that will not become even a remote possibility until the current economic Sodom and Gomorrah Ponzi Scheme is brought to a halt by its own contradictions.
No doubt people will scoff and sneer at my thoughts. But do not worry, I am quite used to that.
You must have been a treat in the class room.
I have been around long enough to know what I can get away with Selkie. But since I reached retirement age I am a little less restrained. If I go too far one day, all will not be lost.
Being old is a much misunderstood super power.
There has to be some compensation for being a decrepit old fogy! But, as they say, the alternative is worse!
Being an old fogey has many delights unknown to vapid youth but there are none for the young fogeys – they were born old.
The 80s were full of them, Thatcher’s Children who missed out on the 60s and were too uptight for the 70s, just vats of seething resentment.
Unfortunately some of those managed to breed and produced Millennials.
The sort who see politics as a profession, set up a pension fund at 20 and commence senescence before their 30s with a mortgage.
They should have been strangled at birth or at least sterilised – the Y/Fs, not their etiolated offspring who might yet prove useful, if only as hewers of water & drawers of wood.
The finance industry across all forms is a blood-sucking vampire squid. There was a time when the major banks were govt owned and run, and the main insurance group was the govts, and the other was a non-profit collective. Nary a scandal to be seen. Now they are just places to go to be paid, but not necessarily earn, exorbitant salaries and bonuses, and for private citizens to be sucked dry.
While banking is an essential service, even more today than in my youth, every dollar of revenue (not just profit) is basically a tax on our collective existence. It is rapidly moving into my column of ‘things that should be run by government because they should never be run for profit.’
Could not agree with you more DB. I think that all essential services (telecommunications, gas, water, electricity, jails, education and health to name a few) should be owned and operated for the benefit of the community by the government as public services and not for private profit. And, as you suggest, few, if any services could be more essential than banking.
Like you DB, I grew up in an era where the banks were regulated to a degree and as you say we had government owned banks. That situation was not perfect but it was orders of magnitude better that what we have to endure today.
Anyone who thinks that the current arrangement can be ‘reformed’ is delusional.
Yes I remember when I went to the bank every fortnight to cash my paycheck. ALL staff knew me by name and were always friendly. I remember one day when the Accountant asked me to step into the manager’s office.
I asked what I had done. Nothing, he said but a wino was coming up behind me to put the word on me for some money.
Yes they had Banks in the down town areas in those days.
On another occasion I arranged a loan over the phone in five minutes with a Bank manager I had never met or seen at a bank I did not have an account at. I was known so no need to do the paperwork.
Today one cannot even find a phone number for the bank let alone easily speak to a person who can quickly solve one’s problem.
I’d never put the far left in charge of banking. They’re so ideological they embrace people with intolerant views because said people aren’t from the white majority, so therefore they are good. Ask the left their plan for pockets of Australia where multiculturalism has failed.
The left are so delusional they’d probably give banking to Islamic terrorists because not to do so would be Islamaphobic.
we need other forms of banking like Credit Unions/Mutual Banks to have as much clout as the Big 4 – provide real competition in the retail/small business and housing lending. Perhaps the RBA should be looking in their direction rather than being a comfy buffer for the Big 4..
It defies credulity that people still use the Big 4 – credit unions/building societies, even the ancient Starr-Bowkett friendly groups can provide all domestic requirements, from mortgage to hire purchase and credit card for lower charges and benefit to all.
So many problems with this system. The umpire (AFCA) still lacks teeth, and like in our case, even when the bank has frozen all of our accounts leaving us relying on charity for essentials, they will still allow the bank 6 weeks to put in their first response.
Given the size of the sex industry, you’d think that someone in banking would see it as an untapped market. Plenty of smaller players around, some of whom surely aren’t products of Victorian era priggishness.
I know the sex industry well. It is a dirty industry (no pun intended), I don’t blame the banks for steering clear. Just because the banks have run into trouble elsewhere doesn’t mean they owe it to other troubled industries to give them banking.
Just because an industry is legal doesn’t mean it’s above board. There are plenty of legally operating industries that are filthy.
Middle class white progressives are a funny bunch, they loooove to rave about the sex industry rights. The reality of sex work in Australia is extremely grim. The only reason it is legal is because arresting workers would make a terrible job even worse. The ‘sex worker positivity’ nonsense has to be the biggest joke going around. Something can be legal without you being positive or encouraging about it or denying the reality.
“Middle class white progressives are a funny bunch, they loooove to rave about the sex industry rights. The reality of sex work in Australia is extremely grim. The only reason it is legal is because arresting workers would make a terrible job even worse.”
It seems consistent with the progressive ideals of harm minimisation and individual choice. Prostitution isn’t ever going away, so why shouldn’t progressives want to see it made as safe as possible for those who work in it?
There is difference between harm minimisation and being pushed around to be ‘positive’ about something. You can believe something should be legal but also recognise it’s not a good thing. I am tired of being told to be ‘sex worker positive’ and to ‘celebrate’ the industry. It should be legal but it’s also a terrible industry and I’m not going to ‘positive’ about it.