We Are Pleased To Announce That We Are Passing On This Rate Increase In Full On Your Variable Home Loan…

The heading for this blog post is taken from a message sent out in the past day by ME Bank to its home loan customers, following the announcement by the Reserve Bank that official interest rates were rising.

This tone deaf message probably marks the dissolution of the last vestige of the myth that ME Bank is there for its customers.

ME Bank started out as a home loan provider owned predominantly by a coalition of superannuation funds (ie the institutions which hold and manage the private retirement savings for most Australians, including yours truly). It was, for much of its history, known as Members Equity Bank.

Customers would have been under the impression that, as an offshoot of industry superannuation funds, ME was on their side, and that it was indirectly owned by them.

The idea that ME Bank is, or ever was, on the side of the customer is of course an illusion, and one which has lingered long since evidence to the contrary started appearing in their business practices and ownership structure.

In April 2020, ME Bank changed the redraw facilities on certain existing home loans unilaterally without informing customers first. This led to considerable customer backlash, as indeed it should, and led to the resignation shortly afterwards of the Bank’s CEO.

A year later the 26 industry superannuation funds who owned ME Bank sold it to the Bank of Queensland. This commercial transaction meant that ME Bank was no longer what it purported to be, a lending vehicle of, by and for superannuation fund members (to borrow my phrasing from Abraham Lincoln).

Now, in a moment of rare commercial honesty, ME has told its customers that it is ‘pleased to announce’ that it is passing on the rate rise in full. I like the lack of contrition. We need more of it in commercial life.

You really do have to wonder why people still think that this bank is different from the ruthless sharks in the Big Four. I’ve never bothered to bank outside the Big Four (except for my back up account with Border Bank, which is a fraction of my actual banking foot print, and which offers an underwhelming app), and I see no reason to go looking for alternatives to my usual banking practices.