Bank deposit garauntee

[Ken]

On 04/05/2020 at 12:47, Marisawright said:

You're right.

What happened is that ME Bank's formula for calculating redraw amounts has been wrong for years.   The result was that people could have withdrawn too much, leading them to be in arrears with their loan.   ME Bank has now corrected the formula.

The trouble is, people made extra payments on the basis of the old formula, and many were banking on withdrawing the lot in the current crisis.  

Can't help but wonder if the fact that ME Bank is owned by the Industry Super Funds who are desperately looking for liquid cash at the moment (so they can pay out all these Coronavirus permitted early withdrawals) is somehow related to ME Bank having to suddenly "correct" their formula?

Edited May 5, 2020 by Ken

[SusieRoo]

Looks like APRA are now investigating ME Bank, which is good news. With a bit of luck, customers who had their saving pilfered will get their money returned. This would also send a clear message to other banks contemplating doing the same thing.

Personally, if I had a 'Redraw' account with any bank, I would withdraw all my savings now and keep them safe in a separate account at a different bank (or even under the mattress).

[NicF]

1 hour ago, SusieRoo said:

Looks like APRA are now investigating ME Bank, which is good news. With a bit of luck, customers who had their saving pilfered will get their money returned. This would also send a clear message to other banks contemplating doing the same thing.

Personally, if I had a 'Redraw' account with any bank, I would withdraw all my savings now and keep them safe in a separate account at a different bank (or even under the mattress).

The Commonwealth adjusted there redraw calculations a little while ago which may have resulted in people’s redraw facility being reduced but they communicated with customers before hand with lots of warnings that the amount you could withdraw might reduce and to use a seperate savings account if this would be an issue.  They may have been talking about future overpayments thinking about it but I didn’t pay much attention because I overpay to pay off my mortgage sooner not to build up savings.  Presumably people’s money hasn’t actually been taken by ME as their mortgages are smaller than what they would have been if they had redrawn the funds first but they just can’t access the funds easily.