CBA Refuses Full Refund of $270M in Excessive Fees to Low-Income Customers

Why CBA Is Holding Back $177 Million from Low-Income Customers

Commonwealth Bank of Australia, the nation's largest lender, is under sustained political and regulatory pressure over its treatment of low-income customers. CEO Matt Comyn appeared before a parliamentary committee in Canberra on Friday and confirmed the bank would not fully refund $270 million in excessive fees it charged Centrelink recipients between 2019 and 2024. The bank has returned only $93 million of that amount voluntarily, despite posting $11 billion in cash profit for the year to June 30.

The scrutiny intensified after the Australian Securities and Investments Commission sued CBA the previous day over $8.5 million in allegedly hidden fees attached to business accounts. Comyn told MPs the bank had refunded more than 90 per cent of affected business customers and contacted the remainder, tracing the issue back to 2006. But when questioned on why low-income customers did not receive the same treatment, he said the bank had targeted refunds where it considered most appropriate and that reasonable minds could differ on what was fair.

Labor MP Ed Husic, who chairs the inquiry, challenged Comyn directly, telling him CBA should repay those customers and asking why the bank would choose this as a point to defend. Comyn declined to engage on whether the fees were excessive, framing the issue as one of balance rather than semantics.

The hearing also covered housing. CBA's construction loans jumped 25 per cent in six months, financing 6,130 dwellings in the 2025/26 financial year compared with 4,440 the year before. First-home-buyer mortgage applications nearly doubled year-on-year in October, rising from 14.8 per cent to 28.5 per cent of total applications, while the investor share halved to 22 per cent. Comyn acknowledged the mix has shifted, suggesting recent tax changes may be working as intended.

What the Fee Refund Fight Reveals About CBA's Strategy and Australia's Housing Shift

Why CBA Is Drawing a Line at $93 Million

Commonwealth Bank's refusal to fully refund the $270 million is a calculated commercial decision, not an oversight. The bank has already returned $93 million out of goodwill and argues it has met its legal obligations under the terms and conditions that governed those accounts. By holding firm, CBA avoids setting a precedent that could invite similar claims across other fee categories and customer segments. With $11 billion in annual cash profit, the bank can easily afford the remaining $177 million, but the principle of limiting retrospective liabilities carries more weight for management and shareholders than the immediate reputational cost.

The ASIC Lawsuit Raises the Stakes

The timing of ASIC's lawsuit over $8.5 million in allegedly hidden business account fees is significant. It came just one day before Comyn's parliamentary appearance, ensuring the fee issue dominated the hearing. While $8.5 million is a small sum for a bank of CBA's size, the case signals that the regulator is willing to pursue fee-related misconduct through the courts. If ASIC succeeds, it could establish a precedent that makes it harder for banks to rely on contractual terms to justify fees that are not clearly disclosed. For CBA, the legal and reputational costs of fighting may eventually outweigh the savings from withholding refunds.

What the Housing Data Reveals About Tax Policy

CBA's construction lending data provides early evidence that recent federal budget changes to negative gearing and capital gains tax are influencing investor behaviour. Construction loans rose 25 per cent in six months, while first-home-buyer applications nearly doubled year-on-year and the investor share of mortgage applications halved. This shift aligns with the policy intent of encouraging new-build investment over existing property purchases. Westpac, by contrast, reported its home-building loans fell nearly a third in 18 months, suggesting the major banks are experiencing the policy shift differently. For context, nationwide investor lending has fallen 30.6 per cent, according to data cited in the hearing.

NAB's Productivity Argument Gains Traction

National Australia Bank CEO Andrew Irvine used his appearance to argue that Australia's obsession with housing investment is misallocating capital away from more productive uses. Comyn agreed, noting that long-term wealth creation cannot come from buying and selling increasingly expensive houses to each other. He described housing construction productivity as shockingly poor and suggested freezing changes to the building code to spur more construction. This shared view among the big four banks suggests a growing consensus that policy settings should prioritise productive investment over property speculation, though it remains unclear whether this will translate into concrete policy recommendations from the inquiry.

What CBA's Stance Means for Investors, Customers and Competitors

CBA's decision to withhold $177 million in refunds is a reputational risk that outweighs the financial savings, especially as ASIC pursues a separate fee case.

For investors, the bank's $11 billion profit and dominant mortgage position remain intact, but the parliamentary inquiry and ASIC lawsuit introduce regulatory uncertainty that could escalate if political pressure mounts. The housing data showing a shift toward first-home buyers and construction lending suggests CBA is well-positioned to benefit from policy-driven changes in the mortgage market, though Westpac's declining construction loans indicate the transition is uneven across the sector.

• 0–6 months: Watch for ASIC's progress on the $8.5 million business account fee case and whether the parliamentary inquiry recommends legislative changes to fee refund obligations. CBA's next earnings report will show whether the reputational damage affects customer acquisition or retention.
• 6–24 months: Monitor whether the negative gearing and capital gains tax changes continue to shift mortgage demand toward first-home buyers and construction. If CBA's construction loan growth persists, it could offset margin pressure from a changing borrower mix.
• 2–5 years: The precedent set by ASIC's case and the inquiry's findings could reshape how Australian banks structure fees and refunds, potentially increasing compliance costs across the sector.

Metrics to watch: CBA's next half-year cash profit, ASIC's case timeline, monthly housing finance data from the Australian Bureau of Statistics, and the investor share of new mortgage applications.