Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697636262241.pdf (Australia)
Australian Securities and Investments Commission Answers to Questions On Notice Committee Agency Question No.

Topic Reference Committee member Mr Jason Falinski MP House of Representatives Standing Committee on Economics Australian Securities and Investments Commission ASIC22QW ASIC funding of consumer groups Written Question: In Question on Notice 008 after the 18 November Parliamentary Joint Committee on Corporations and Financial Services hearing, I asked about ASIC funding of consumer groups.
In response ASIC advised that funding of consumer groups was a practice in the past as a direct outcome of enforceable undertakings entered into by banks and other financial firms.

(a) When did this practice cease?

(b) Previous answers to questions regarding enforceable undertakings have not provided details of community benefit payments.

ASIC has instead invited me to look at all the enforceable undertakings on the ASIC register.
Could you give please provide the total sum of money that has been paid through these means?

(c) What other programs do ASIC have where monies are paid to advocate groups or external advocate groups?

Answer: (a) When did this practice cease?

In response to Question No: 011 – 01 (d), ASIC confirmed that it does not directly fund consumer groups.
In that response, we explained that ASIC has in the past, entered into Court Enforceable Undertakings (CEU) with banks and other financial firms that include an agreement to make a community services payment (sometimes referred to as a community benefit payment) to a charity or other appropriate recipient.
The purpose of these payments has been to fund the recipients to provide particular services, education or information to consumers within the cohort who may have been / were likely to have been affected by the relevant misconduct (e.g.

older people, Indigenous consumers, people with low financial capability).

ASIC has not formally ceased using CEU which remain a regulatory tool open to use by ASIC, and a community services payment may also be considered appropriate in any future CEU.
A decision to provide for a community services payment in an CEU will be subject to considerations such as the nature of the misconduct; terms of proposed CEU; and ASIC’s guidance in Regulatory Guide 100: Enforceable undertakings (RG 100) with the relevant considerations from that RG set out below.
RG 100.36 An enforceable undertaking may require a promisor to perform a community service obligation such as disgorging profits from unlawful conduct by paying money to affected consumers, funding an education program for consumers, or paying money to a charity or community organisation.
2 RG 100.37 We will generally apply the following principles when considering whether to accept an enforceable undertaking that includes a community service obligation: a) priority will be given to payments directed to compensating persons who have suffered loss as a result of the conduct the subject of the enforceable undertaking; b) if persons affected by the conduct the subject of the enforceable undertaking cannot be identified, or it is impracticable to compensate them, we may accept an undertaking to fund an education program, or pay money to a charity or community organisation; c) we will not take account of an offer to perform a community service obligation in deciding whether to refer a brief to the Commonwealth Director of Public Prosecutions (CDPP) in respect of the promisor; d) the community service obligation should be directed to purposes related to the conduct the subject of the enforceable undertaking; and e) generally, we will not accept an enforceable undertaking that provides for the payment of money to ASIC or to a third party where ASIC has direct control over how that money is spent.
We may depart from this principle in order to ensure the payment relates to the alleged conduct, and/or to ensure proper accountability as to how money is spent.

For example, we may accept: (i) a community service payment to ASIC to produce specified education materials; or a payment to a third party to produce or fund an education program where ASIC has control over the timeframe, subject matter, target population, medium of communication, or to include reporting obligations.
(ii) RG 100.38 The amount of a community service obligation should generally be proportional to the alleged conduct having regard to: a) the penalties that could be applied in relation to the alleged conduct; and b) the amount of profit made, or loss avoided, as a result of the conduct the subject of the enforceable undertaking.

(b) Previous answers to questions regarding enforceable undertakings have not provided details of community benefit payments.
ASIC has instead invited me to look at all the enforceable undertakings on the ASIC register.

Could you give please provide the total sum of money that has been paid through these means?

Financial services firms have paid $94.5 M in community services payments as part of Court Enforceable Undertakings (CEU) in the past ten years (to calendar year 2011).

The details of these payments are contained in the text of each CEU and summarised in Table 1.
(c) What other programs do ASIC have where monies are paid to advocate groups or external advocate groups?

In response to Question No: 011 - 01 & 02, ASIC set out the allocation of funds for the preparation of consumer submissions or consumer research under the auspices of ASIC’s Consumer Advisory Panel (CAP) for the past ten years.
For completeness, we refer to our response to Question No: 011 – 01 (d) in which we stated that ASIC has in the past – and continues to – monitor some consumer remediation programs conducted by financial firms.

Where funds are not able to be returned directly to all of the consumers affected by the firm’s misconduct or error, then the residual remediation funds is 3 sometimes paid by the firm to an appropriate organisation with a community service purpose.
This is consistent with ASIC guidance about remediation in RG 256 (currently under review) which states that firms must not profit from the misconduct or other compliance failure (see paragraph 135).

That is, that they cannot hold onto funds because they have lost contact with the affected consumers.
ASIC has records of almost $9 M in such payments being made to charitable bodies and not for profit NGOs including community legal centres, for example, where ASIC has had some involvement in the remediation process.

Such payments generally relate to services, education, or information to consumers within the cohort who may have been / were likely to have been affected by the relevant misconduct.

This is, however, only a portion of the total financial consumer remediations that have taken place.
There are many other financial sector remediations completed or underway which are managed by financial firms without any involvement of - or reporting to - ASIC.

we understand that a proportion of these will also involve payments to a relevant charitable or not for profit organisation, and both the selection of the recipient and the use to which funds are to be applied will be determined by the financial firm.
In both CEUs and non-CEU remediation processes giving rise to a payment, the firm directly pays the relevant charitable recipient.

For the payments under a CEU, and for payments arising through a remediation that ASIC has been closely monitoring, ASIC requires recipients to report on their use of these funds.
ASIC is currently consulting in Consultation Paper 335: Consumer remediation: Update to RG 256 (CP 335) about our proposals to clarify current guidance when remediation money cannot be returned to consumers.
Our proposed guidance is that if a licensee cannot, despite best endeavours, find consumers to pay them compensation (including when cheques remain uncashed): (a) the licensee must not profit from the failure (see the current RG 256 at RG 256.135); (b) the residual funds should be sent to a relevant state or federal unclaimed money regime if available; and (c) if the licensee is unable to lodge money with an unclaimed money regime, as a last resort, the money should be paid as a residual remediation payment to a charity or not- for-profit organisation registered with the Australian Charities and Not-for Profits Commission.
Finally, for completeness and transparency, from time to time ASIC meets the reasonable travel or related costs for consumer stakeholders in course of financial capability initiatives, such as participation on the Government’s Financial Literacy Board, or the work of ASIC’s Indigenous Outreach Program (IOP).

4 Table 1 – Payments made by firms to recipient organisations under court enforceable undertakings The table is presented with the most recent payment appearing at the top.
Date of EU EU number Firm Recipient Amount Date paid Project summary 29/10/2018 30140656 Local Appliance Rentals The Smith Family $103,729 18/01/2019 22/10/2018 30445123 Mr Eli Ekman Ecstra $10,000 11/10/2018 9/07/2018 30133832 CBA (BBSW) Ecstra $15,000,000 20/07/2018 5/07/2018 30219284 ANZ - My Super Super Consumers’ Centre $1,250,000 31/07/2018 3/07/2018 30219285 2/07/2018 30133804 CBA - MySuper Goldman Sachs $1,250,000 27/07/2018 Super Consumers’ Centre Ecstra $500,000 25/07/2018 20/06/2018 30133804 Vantage Global Prime The Ethics Centre $95,000 22/7/2018 24/04/2018 30133642 Malouf Financial Counselling Foundation (varied from FLA) $750,605 2 payments 30/06/20 and 23/11/20 9/04/2018 30219203 & 30219204 CBA (FFNS) Dementia Australia Indigenous Consumer $175,000 18/06/2018 $400,000 05/06/2018 Learning for Life Program -supporting young people to gain Certificate in Financial services (see report on Register) Ecstra provides grants to NGOs for financial capability projects Ecstra provides grants to NGOs for financial capability projects Consumer education and resources relating to superannuation (see reports on EU Register) Ecstra provides grants to NGOs for financial capability projects Range of projects (report coming shortly) FCF provides grants to NGOs for financial counselling services – this program focused on people affected by domestic and family violence Dementia-Friendly Banking Initiative Financial counselling, financial 5 Assistance Network Financial Counselling Foundation $1,200,000 24/05/2018 COTA
 $175,000 08/06/2018 $175,000 05/06/2018 $175,000 21/06/2018 $400,000 06/06/2018 $300,000 05/06/2018 $1,375,000 22/05/2018 $250,000 15/06/2018 $1,375,000 22/05/2018 $400,000 27/02/2018 National Seniors Seniors Rights Service NSW The Ethics Centre Settlement Services International Financial Literacy Australia (now administered by Ecstra) The Ethics Centre Financial Counselling Australia Financial Literacy Australia (now administered by Ecstra) capability and education programs FCF provides grants to NGOs for financial counselling services – this focused on increasing capacity of the National Debt Helpline as well as research into Indigenous helpline.
Projects relating to older people Financial Information Desk Support for range of services Range of projects (report coming shortly) Financial capability programs for refugees and migrants in western Sydney Ecstra provides grants to NGOs for financial capability projects Range of projects (report coming shortly) Support for the National Debt Helpline Ecstra provides grants to NGOs for financial capability projects 29/03/2018 30219182 ANZ (FFNS) 16/02/2018 30219140 David Lawrence Orth 13/02/2018 30133494 Frank John Tearle The Ethics Centre $100,000 15/03/2018 Range of projects (report coming 6 13/02/2018 30133506 Justin Kurt Epstein The Ethics Centre $100,000 12/03/2018 23/01/2018 30133417 Thorn Australia (Radio Rentals) Financial Counselling Foundation $2,425,140 08/01/2020 & 26/02/2020 24/11/2017 28424908 Foster Stockbroking The Ethics Centre $80,000 13/12/2017 20/11/2017 2842906 ANZ (BBSW) Ecstra $20,000,000 22/05/2018 20/11/2017 28424907 NAB (BBSW) Ecstra $20,000,000 25/05/2018 23/05/2017 29490310 Motor Finance Wizard, i.e: Brotherhood of St Laurence $153,761 30/04/2018 Affordable Car Loan 19/05/2017 29337448 Macquarie Bank Limited The Smith Family $2,000,000 02/06/2017 22/03/2017 29506346 Barclays entities The Ethics Centre $500,000 12/04/2017 15/03/2017 29804839 $3,000,000 15/03/2017 Westpac (FX) Financial Literacy Australia (now administered by Ecstra) 15/03/2017 29804840 ANZ (FX) $3,000,000 15/03/2017 Financial Literacy Australia (now administered by Ecstra) shortly) Range of projects (report coming
 shortly) FCF provides grants to NGOs for financial counselling services – this program focused on people affected by domestic and family violence Range of projects (report coming shortly) Ecstra provides grants to NGOs for financial capability projects Ecstra provides grants to NGOs for financial capability projects Affordable Cars for Employment (ACE) pilot program Financial Literacy Project including roll-out of Cert 1 in Financial Literacy Range of projects (report coming shortly) Ecstra provides grants to NGOs for financial capability projects Ecstra provides grants to NGOs for financial capability projects 21/12/2016 2974437 CBA (FX) 21/12/2016 29744349 NAB (FX) 8/12/2016 29804349 Hochtief AG 7 Financial Literacy Australia (now administered by Ecstra) Financial Literacy Australia (now administered by Ecstra) Australian Shareholders Association The First Nations Foundation $2,500,000 04/01/2017 $2,500,000 23/01/2017 $103,400 8/12/2016 $103,400 8/12/2016 2/12/2016 29804328 BMW Australia Finance Limited Consumer Action Law Centre $750,000 28/06/2017 $2,500,000 14/02/2017 Financial Counselling Foundation Moneymob $120,000 28/06/2017 $630,000 28/06/2017 $1,000,000 28/06/2017 Financial Rights Legal Centre Financial Counselling Australia Ecstra provides grants to NGOs for financial capability projects - this program focused on projects relating to older people Ecstra provides grants to NGOs for financial capability projects – focus on older people Advancement of
 shareholder education in Australia, and company monitoring Initiatives with the Financial Services Council on My Moola - the Foundation's adult financial literacy program.
Casework for vulnerable and disadvantaged consumers, and enhanced website to provide consumer education FCF provides grants to NGOs for financial counselling services – focus on Indigenous people and Townsville residents after the flood.
Talkabout Loans and Phones Project Support for the centre’s work in credit and debt advice and casework services Funding for the National Debt Helpline 4/11/2016 29744238 Cash Converters The Salvation Army - WA $312,610 28/11/2017 8 18/03/2016 29533337 Nimble Australia Financial Counselling Australia $216,776 20/07/2016 24/02/2016 29533136 ACE Insurance Ltd The Smith Family $500,000 24/03/2017 $500,000 24/03/2017 Financial Counselling Australia 22/12/2015 29305824 22/12/2015 29305829 Angus Aitken & Bell Potter Securities Financial Literacy Australia Philip King and Regal Funds Management Financial Literacy Australia 26/05/2015 29269078 Amazing Rentals 5/12/2014 28965993 Interactive Brokers LLC North Australian Aboriginal Justice Agency Top End Women’s Legal Service Financial Rights Legal Centre $80,000 15/01/2016 $80,000 12/01/2016 $5,000 26/05/2015 $5,000 26/05/2015 $100,000 5/12/2014 21/07/2014 28492040 and 28492039 Royal Bank of Scotland (BBSW) Financial Literacy Australia $1,600,000 01/08/2014 3/02/2014 28399424 Home Essentials Australia & Indigenous Consumer Assistance $125,000 3/02/2014 Support for WA Doorways Program - support to people break cycle of debt/poverty Range of tools to help build the capabilities of financial counsellors Funding to support the development and delivery of the Certificate 1 Financial Literacy Program Range of tools to help build the capabilities of financial counsellors FLA provided grants to NGOs for financial literacy projects FLA provided grants to NGOs for financial
 literacy projects Civil legal advice and services to Aboriginal people in the NT Consumer education including video warning consumers about debt management firms FLA provided grants to NGOs for financial literacy projects Financial capability and other services for Indigenous 9 others Network people 28/01/2014 28399392 BNP Paribas (BBSW) 23/12/2013 28553827 NAB 23/12/2013 28553828 UBS AG $125,000 3/02/2014 Pilbara Community Legal Service $1,000,000 31/03/2014 $2,000,000 31/03/2014 $1,000,000 02/04/2014 Financial Literacy Australia Financial Literacy Australia Financial Literacy Australia Community legal services particularly for Indigenous people FLA provided grants to NGOs for financial literacy projects FLA provided grants to NGOs for financial literacy projects FLA provided grants to NGOs for financial literacy projects