Light of Day
Media Release March 12th
Investors Group Backs Reserve Bank on Interest Rate and Fee Gouging
….an estimated $550 million annually of retirees’ savings in the unlisted property trust sector had been turned into bank profits by fee gouging and excessive interest rate hikes.
Light of Day, an association of investors in the unlisted property trust sector, has backed the Reserve Bank on its findings that the increases in interest rates have more than fully offset banks’ costs and resulted in interest rates gouging of billions of dollars.
Associate Professor Owen Lennie spokesman Light of Day Inc said the Governor of the Reserve Bank, Glenn Stevens, should immediately launch a review of interest rate and fee gouging by banks in the $62 billion unlisted property trust industry, which has left tens of thousands of investors, many of them elderly, with their funds frozen.
“The Reserve Bank should be inquiring into how some estimated $550 million annually of retirees’ savings in the unlisted property trust sector has been turned into bank profits by fee gouging and excessive interest rate hikes.”
Mr Lennie said the power placed in the hands of the banking system by the Federal Treasurer, Wayne Swan, through the taxpayer funded bank guarantee on deposits up to $1 million has seen excessive fee and interest rate gouging leading to distributions being suspended or slashed, redemptions frozen, and liquidity questionable.
“The unlisted property trust sector is one the worst examples of interest rate and fee gouging which is being covered up as the Federal Treasurer has continued to stand idly by whilst investors funds and equity has been systematically plundered.
“With the latest Reserve Bank Report estimating billions of dollars have been gouged out of Australian’s savings through supersized interest rate rises, we believe it is time the Federal Treasurer and the RBA actually took some action on the banking industries destruction of the unlisted property trust area under the taxpayer funded Rudd Government bank guarantee on deposits up to $1 million.
Mr Lennie said Light of Day had requested the Australia Securities and Investments Commission to investigate legal questions under the Corporations Act about secrecy surrounding details of bank loan pricing and conditions. Much greater disclosure is required of fees, margins and covenants and other loan terms, when the borrower is a public investment vehicle, such as a property trust or property syndicate.
Associate Professor Owen Lennie will give the key note address on Monday morning to the annual Australian Direct Property Industry Association Conference at the Sebel Heritage in Melbourne’s Yarra Valley and will outline the issues involved in the future of the industry.
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Media Enquiries: Owen Lennie, Spokesperson, Light of Day Mobile: 0411 507 505
