The Commonwealth Bank (CBA) has backed down on threatening foreclosure on homes in the NSW town of Salt Ash which have been contaminated by chemicals used at the nearby Williamtown defence base.
Property values in the area have plunged after it was declared to be in the “red zone”, because chemicals from the RAAF base had leached into the area’s bore water.
Banks had threatened foreclosure, but after the matter was raised at last week’s parliamentary inquiry into the banking sector, CBA says its foreclosure letters were the result of an administrative error.
Rob Roseworne, a home and business owner in Salt Ash who is a CBA customer, said his bank had been spooked by his properties’ subsequent drop in value.
“Initially I felt that I was being harassed and bullied and threatened with foreclosure,” he said.
“It was just a concern that was adding to the mental anguish all of the community was suffering at the time.
“The home loan was not in arrears and the letter that came out was adamant that if they wanted to or needed to, they could progress to legal action without any further correspondence to me.
“If it came up on one letter, you might put it down to being a mistake, but we have about four, five letters in about six to seven days.”
Mr Roseworne also said that CBA had refused to reduce his repayments in line with the Reserve Bank’s interest rate reduction because his property was deemed a “local risk”.
‘Is this happening to other communities?’
Pat Conroy, the federal Labor member for Shortland, raised the issue at the banking inquiry last week.
Mr Roseworne said not long after that, he got a call from the bank.
“I was contacted by an executive of the bank in group corporate relations and they were very, very apologetic and substantiated my claims,” he said.
“My concern was specifically that the CEO of the Commonwealth Bank had voiced a concern to Mr Conroy that he doubted that my claims were actually the case, but they were substantiated by the executive of the bank.”
The executive told Mr Roseworne and the ABC that the letters were simply an administrative error.
A statement provided by the bank said: “Commonwealth Bank continues to lend for residential properties in Salt Ash. We assess every application and existing home loan on a case-by-case basis.
“We always work with customers to address their concerns and complaints.
“Where we have done wrong, we will always work with them to put it right.”
Mr Conroy said while he was sceptical that the claim was an error, he was relieved they had acknowledged the mistake.
“I question whether this was a computer glitch or whether this was part of the culture of the Commonwealth Bank that has caused problems in other areas,” he said.
“So, it’s good news that they’ve resolved it.
“But again, the question has to be asked what happened, what would have happened if the resident hadn’t contacted me and I hadn’t raised it at the parliamentary inquiry.
“Is this happening to other people in the community and other communities that are impacted by this groundwater contamination issue?”
Government needs to release funding: community group
Nick Marshall, the president of community group Salt Bush Community First, said residents had been told about a month ago that this bank did have a blanket policy of not lending to residents.
And he said other residents had been given a similar treatment by banks as Mr Roseworne.
“This is where the Government needs to lead by example, that’s where the Government needs to step in and release funding, ” Mr Marshall said.
“The funding is there, we know it’s sitting there, but because this hasn’t been declared a natural disaster or a state of emergency the legislation won’t allow them to release that funding of loans to residents in the area.
John Williams, a Nationals senator, said he had received assurances from CBA and other banks, as well as the Australian Bankers Association, that they would be considerate of residents’ circumstances.
Meryl Swanson, Labor member for Paterson, said she was aware of banks not lending to Salt Ash residents and valuers refusing to step onto properties because of occupational health and safety concerns.
“Basically it is the role of the government to deal with the banks on this and saying to the banks that these people that have found themselves, through no fault of their own, in this absolutely impossible situation, need to be treated fairly and they need to be treated favourably by the banks,” she said.
The Department of Defence provided a statement saying it had been talking with lending institutions about their policies.
“While decisions on valuations and lending practices and policies are a matter for individual firms,” the statement said.
“Defence continues to work with valuers and lenders to provide information about the results of the investigation to date, and the implications that these results may have for decisions on valuations and lending.”