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A non-major has scrapped its controversial redraw policy following widespread, cross-industry criticism.
Last week, it was reported that super fund-owned lender ME Bank had reduced the amount borrowers could redraw from specific legacy mortgage products without forewarning customers.
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While permitted under ME’s terms and conditions, the policy decision was met with backlash from customers, brokers and the broader community.
In response, ME announced that it would review its decision in consultation with affected customers.
ME has now revealed that it has decided to “change back” home loan redraw limits for any customers who wish to opt out.
The bank has acknowledged that the policy was “poorly communicated” and has “upset customers”.
“Some of our customers have told us they want their redraw limits changed back to what they were before. We are going to do that,” Jamie McPhee, CEO of ME Bank, said.
“We have set up a dedicated hotline for any customer who would like their redraw limits changed back or, if they prefer, they can request it online.
“We are deeply sorry; we were trying to do the right thing, but we went about it the wrong way.”
Mr McPhee sought to reassure customers that the bank had not removed funds from customer accounts or transferred any customer funds and did not make the adjustment for “liquidity reasons”.
“Our priority now is to help, support and service our customers,” he added.
“We recognise that we need to do better – we can and we will.”
[Related: ME Bank reviewing affected redraw customers]
