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Senior counsel assisting Rowena Orr says there has been © Supplied Senior counsel assisting Rowena Orr says there has been "misconduct" in banks' treatment of farmers. It is open for the royal commission to find ANZ Bank engaged in "misconduct" in its treatment of a range of farmers that became customers after it bought the rural lender Landmark, senior counsel Rowena Orr says.

Following two weeks of public hearings focused on farming and remote areas, Ms Orr on Friday delivered "open findings" that could be made by Commissioner Kenneth Hayne, alleging multiple cases of "misconduct" at ANZ Bank.

Commonwealth Bank's Bankwest may have also engaged in “misconduct” by breaching the code in several ways in its treatment of Queensland cattle farmer Mel Ruddy, which included relying on an old valuation to trigger a default, Ms Orr said.

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RaboBank is another lender that may have engaged in "misconduct" in its treatment of Queensland farmer Wendy Brauer and her husband, Ms Orr said. Ms Brauer last week told the commission the couple was left $1 million worse off after a loan to buy a farm from a bank manager, who was also working for other parties on the deal.

In her closing address, Ms Orr pointed to a range of examples that could be seen as "misconduct" by ANZ towards former Landmark clients, including instances where the bank was too quick to take enforcement action, or refused reasonable settlement offers from clients.

Ms Orr suggested some of the behaviour by ANZ was a breach of the industry code of conduct, while other instances fell short of community expectations. She did suggest breaches of the law relating to ANZ and Landmark.

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A root cause of the misconduct was that ANZ underestimated the number of struggling loans it was acquiring when it bought Landmark in 2010, according to Ms Orr.

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“ANZ did not calculate the number of incoming customers who were going to experience financial difficulty,” Ms Orr said in Darwin.

There was also a lack of training with ANZ's "lending services" branch that dealt with struggling customers, and many former Landmark staff left the bank, leading to a loss of corporate memory.

'Lack of empathy'

It was also open for Commissioner Hayne to find that misconduct by ANZ was caused by the culture in lending services, which Ms Orr said showed a “lack of empathy” and failed to consider the emotional impact of its enforcement actions.

ANZ's head of lending services, Benjamin Steinberg, admitted on several occasions that the bank's conduct had fallen below expectations when he appeared before the commission in Brisbane last week.

Earlier on Friday, ANZ was quizzed about the practice of providing "informal" overdraft facilities to customers who may well be denied a formal overdraft if they applied for one.

Counsel assisting Mark Costello tabled a bank statement from an Indigenous customer on Groote Eylandt in the Northern Territory, who was on Centrelink benefits and was charged nine overdrawn fees in the space of two weeks, costing him $54.  Informal overdrafts also attract interest rates of about 17 per cent, the commision heard.

Commissioner Hayne opened the hearings on Friday by saying he was asking CBA for more information about why it was late handing in documents last week relating to its rural lending.

“Having considered what was said in the letter of 3 July, I have asked the solicitor assisting the commission to seek further explanation from the solicitors for CBA regarding some questions which arise from the terms of their letter,” Commissioner Hayne said

“A letter to that effect was sent soon after yesterday’s hearings finished. In the circumstances I am not yet in the position to decide what course I should follow in relation to these matters.”

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