'We are deeply sorry': ME Bank reverses course on redraw policy change
Boutique lender ME Bank has reversed course on a controversial policy change to mortgage redraw facilities that left over 20,000 customers without access to cash and triggered an emergency response from the financial complaints ombudsman.
ME Bank, which is owned by 26 union-backed super funds, changed a policy in late April that allowed customers to draw down on mortgage debt if they had made payments above the minimum required. Customers were not warned about the changes, which came as concerns mount over the impact of the coronavirus on the economy.
The financial complaints authority has launched an emergency response to ME Bank's bungled redraw policy change.Credit:Ken Irwin
ME Bank on Friday released a statement to say it had abandoned the policy change. A dedicated hotline is now available for customers who would like their redraw limits changed back.
"In response to customer feedback ME Bank has decided to change back home loan redraw limits for any customers who want it," the bank said.
The bank acknowledged the policy change was poorly communicated and chief executive Jamie McPhee apologised to customers.
"We are deeply sorry; we were trying to do the right thing but we went about it the wrong way," Mr McPhee said. “I would like to reassure customers that at no point did the bank ‘remove funds from customer accounts’ or ‘transfer’ any customer funds. Nor was the adjustment made for liquidity reasons.
“Our priority now is to help, support and service our customers. We recognise that we need to do better, we can and we will.”
More to come.