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Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

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ME Bank boss resigns following backlash over mortgage redraw

ME Bank

Jamie McPhee will leave the bank at the end of July, with current chief financial officer Adam Cane to take the reins before a permanent appointment is made

The chief executive of ME Bank has resigned, after more than a decade running the industry super fund-owned bank.

Jamie McPhee will leave the bank at the end of July, with current chief financial officer Adam Cane to take the reins before a permanent appointment is made.

ME Bank chairman James Evans said Mr McPhee had made a significant contribution to the bank, overseeing the increase in its customer numbers from 234,000 to 542,000.

After ten-and-a-half years as CEO, I believe now is the best time to hand over the reins to give ownership of the bank’s post-COVID strategy development and long-term execution to a new CEO, Mr McPhee said.

In deciding to call time, I know the bank is in a strong position financially and is well placed for the future, but that the industry challenges ahead, and resulting need for change, will require a long-term commitment, he said.

Mr Crane will be acting CEO, while the board begins the process of appointing a new chief executive.

ME Bank faced a major customer backlash in May, when it lowered redraw limits on some older home loans without informing borrowers first.

A redraw facility allows customers to make extra mortgage repayments, above the required minimum repayments, which can be drawn down if needed.

ME Bank removed money some customers had accumulated in their redraw facilities and took it off their outstanding mortgage balances, leaving those customers without access to the funds.

In a statement, the bank said the funds transfer applied only to “a portion of legacy loans written more than five years ago”.

Mr McPhee apologised at the time and the bank offered to reverse the changes for customers.

He later told a parliamentary committee that the bank had “got the communication” wrong.

Mr McPhee said it had informed the banking regulator APRA before implementing the changes and it was in continued discussions with the regulator.

The ME Bank redraw backlash came in the middle of the initial coronavirus restrictions, when many banks began offering to pause home loan repayments.

The Commonwealth Bank also faced scrutiny for automatically decreasing around 750,000 customers’ home loan repayments to the minimum amount, unless they opted out.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.