ME Bank backed down in the overwhelming anger of customers who saw the amount they could withdraw from their home loans reduced by thousands of dollars.
The bank, which is owned by 26 industry super funds, said Tuesday it “will now change mortgage repayment limits for all customers who want it.”
General manager Jamie McPhee has apologized for the debacle, his second this week, saying the bank was “deeply sorry”.
“We were trying to do the right thing, but we did it wrong,” he said.
As late as Wednesday, the bank remained firm on policy, despite waves of customer outrage whose withdrawal limits had suddenly been lowered by up to $ 20,000, a request for an explanation of the decision of the prudential regulator and strong pressure from unions and some of its super industry shareholders.
The bank said the move, which affected around 20,000 customers, was designed to protect borrowers.
Redeployment agreements allow mortgage clients who have made additional payments on their loans to dip into the loan and borrow additional money.
ME Bank said it discovered that some withdrawal limits were too high, increasing the risk that customers who used the facility would fall behind on their loans.
But on the bank’s Facebook page, alarmed customers expressed their shock at the decision.
“The money we lost is actually my husband’s severance pay because he was fired last week,” a client said in an article on the page a fortnight ago.
“We are not eligible for Centrelink payments and were relying on these funds to help us,” she said.
The bank has set up a hotline and a website for customers who want their withdrawal limit changed.
“I want to reassure customers that at no time has the bank” taken funds from accounts receivable “or” transferred “funds from customers,” McPhee said.
“The adjustment was not made for liquidity reasons either.
“Our priority now is to help, support and serve our customers. We recognize that we need to do better, we can and we will. “