BOQ, Suncorp to face grilling at Royal Commission

BOQ, Suncorp to face grilling at Royal Commission

The Bank of Queensland (ASX: BOQ) and Suncorp (ASX: SUN) are the next financial institutions set to face the music at the financial services Royal Commission.

The third round of public hearings will discuss loans to small and medium enterprises, and will see BoQ and Suncorop face a grilling, alongside the major institutions.

Running from Monday 21 May to Friday 2 June, the third round of hearings will consider the conduct of financial services entities in respect of their dealings with small and medium enterprises, in particular in providing credit to businesses.

The hearings will also explore the current legal and regulatory regimes, as well as self-regulation under the Code of Banking Practice.

As well as BoQ and Suncorp, the Royal Commission will be questioning ANZ, CBA, Westpac, Bankwest, and NAB.

Business owners and customers will be given the opportunity to give evidence of their experiences with these institutions.

Bankwest is set to be questioned over its dealings with small businesses, especially its treatment of the businesses that were tipped into default at the height of the global financial crisis.

The Australian Banking Association, led by Anna Bligh, will also face questioning alongside the Australian Securities & Investments Commission about self-regulation. ASIC will be questioned on the extension of unfair contract terms legislation to small business contracts.

Small business ombudsman Kate Carnell has been focusing on how the banking sector tips small businesses into default with non-monetary default clauses. This has allowed banks to use contracts to tip borrowers who had been on top of their obligations into receivership.

ANZ, BoQ, Comm Bank, Westpac and Suncorp have been asked to give evidence about responsible lending to small businesses. NAB and Bankwest have been called to face questions about the management and monitoring of loans to businesses.

CBA and Westpac will be questioned about product and account administration practices.

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