The head honchos of Australia's Big Four banks have categorically ruled out withdrawing services from customers operating in lawful industries, such as livestock, on account of 'bad press'.
Appearing at a parliamentary inquiry this month, National Australia Bank's David Gall, the Commonwealth Bank's Andrew Hinchliff, ANZ's Kevin Corbally and Westpac's Michael Rowland denied having blanket internal policies against providing transaction banking to sectors such as coal mining and live export.
The executives were appearing before the Inquiry into the Prudential Regulation of Investment in Australia's Export Industries, which has largely focused on the resources sector but did take evidence from agriculture leaders in the form of the red meat industry.
Livestock exporters earlier outlined cases of financial institutions refusing them business and accused banks of succumbing to pressure from minority interest animal activist groups. They warned if the situation was left unchecked, the livestock industry as a whole could cease to exist.
Mr Gall said NAB would, and does, provide facilities to the live export industry.
"However, we will look at clients on an individual basis and assess that risk on an individual basis to understand whether or not we deal with a specific customer," he said.
Mr Hinchliff said CBA had the ability to deal with live export.
"The main thing we care about in our policy is around animal welfare and an expectation from our clients to be managing animal welfare appropriately," he said.
He indicated there may be other 'idiosyncratic factors about why we may or may not bank a particular client' but said there was 'nothing in our policy' that 'stops us from being able to do it.'
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Mr Corbally, likewise, said subject to a client being able to comply with legal obligations, he could confirm ANZ had the same approach.
Mr Rowland: "That is the same with Westpac."
Former Nationals senator and long-serving advocate for primary producers Ron Boswell appeared before the inquiry in a personal capacity.
He warned the ramifications of denying credit to a particular industry was way beyond the capacity of a joint parliament committee.
It was very serious and must be addressed by the Prime Minister, he argued.
"The implications of this are: Who does the axe fall on next? Is it the gas industry? It is primary industries?" he said.
The only reason legitimate businesses should be refused fair service was if they were unable to meet their financial commitments, Mr Boswell argued.
"The Australian Government must decide what business is legitimate, and not leave it to foreign-owned corporations," he said.
"If the government were to issue that statement, I think that would be a shot over the bows of the banks and they'd fall into line.
"The banks have lost a lot of social credit. Their actions in this are going to further lose them more of the social credit that they have out there in the community."
Mr Boswell's submission to the inquiry spoke about legislative changes in the United States in November last year aimed at ensuring major banks make decisions on the credit worthiness of an application for lending rather than other factors, such as reputational issues.
The regulator, the US Comptroller of the Currency, found some banks had taken these actions based on criteria unrelated to safe and sound banking practices, Mr Boswell's submission said.
These included personal beliefs and opinions on matters of substantive policy that were more appropriately the purview of state and federal legislatures.
The COC ruled that organisations involved in politically controversial but lawful businesses were entitled to fair access to financial services under the law.
Mr Boswell argued a similar 'fair service' rule should be considered in Australia.
Asked during the inquiry whether the same actions that the COC was concerned about were happening here in Australia, Mr Boswell said: "Yes, and very much so."
"It is only the government and the elected representatives in the parliament of Australia that can determine what is legal," he said.
What was occurring in relation to bank's refusing business to certain industries was a "complete usurping of the parliament's powers", he said.