The bank, which is currently owned by a group of superannuation funds, is in the process of being taken over by the Bank of Queensland.
In a short statement, the Australian Securities and Investment Commission said that after an investigation charges were filed against ME Bank in the Federal Court.
ME Bank said the issues that were alleged in the charges were dealt with in 2019.
“The issues were reported by ME to ASIC in 2018. Affected customers were remediated by June 2019,” the bank said.
“Remediation to affected customers was in the order of $105,000.”
These charges relate to alleged contraventions in September 2018 of sections 12DB and 12GB of the Australian Securities and Investment Commission Act and the National Credit Code.
“The court has not yet set a date for the first return of the matter. Further details will be released following that hearing,” ASIC said.
The matter is being prosecuted by the Commonwealth Director of Public Prosecutions following a referral by ASIC.
ASIC did not say what actions the charges related to.
Earlier this year, Bank of Queensland launched a $1.3 billion agreed takeover of ME Bank to significantly broaden its customer base.
But then, earlier this month the Banking Code Compliance Committee sanctioned ME Bank for “serious and systemic breaches of the Banking Code”.
That sanctions appear to have occurred at a different time to the ASIC charges.
The BCCC found that ME Bank’s communications to impacted customers about changes to their redraw amounts in April 2020 were poor and ineffective.
The BCCC’s independent chairperson Ian Govey AM said efficient and effective communication with customers is a paramount requirement of the code.
“ME Bank’s failure to rectify long-standing system issues was a contributing factor to its poor conduct at the time it made the adjustments to customers’ redraw amounts,” Govey said.
“It was imperative that ME Bank notified customers prior to making any adjustments to their redraw facilities, especially given the changes took place when the COVID-19 pandemic was significantly affecting customers’ livelihoods. ME Bank should have given special consideration to the potential health impacts its communications, or lack thereof, would have had on customers at that time.”
ME Bank publicly apologised for its poor communication and decided to change back redraw limits for any impacted customers who requested it. Subsequently, ME Bank contacted all customers who had their redraw amounts reinstated.
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