Crown chair Helen Coonan is chair of PR firm GRACosway, whose clients have been involved in questionable financial transactions and include mortgage brokers fighting commission bans. Her PR role is in conflict with her position as chair of financial complaints ombudsman AFCA, and both make her position at the head of Crown unsustainable.

It was a key recommendation of the Hayne royal commission into misconduct into the banking and financial sector a ban on trailing fees, where banks provide mortgage brokers an ongoing fee for the life of the consumers loan.

The ban was to come into effect from this year but following intense lobbying from the well-connected mortgage broking lobby, the Coalition announced a backdown. Instead, the government will review trailing commissions in 2022.

Critics say the capitulation has left consumers in a worse state. This is because asThe New Dailyreports, the overwhelming evidence is that loans arranged by brokers tend to be larger, take longer to pay down and cost more than loans arranged directly with banks or other providers.

With the bank paying the commission, the incentive is for the broker to direct their clients to the bank with the highest commission.

And because the commission is a percentage of the size of the loan, there is also an incentive to encourage clients to borrow as much as possible.

A 2017 study of the home loan industry by investment bank UBS foundup to a third of mortgages are liar loans based on inaccurate information that may have been massaged to help the borrower get a bigger loan than they should have been eligible for. According to UBS, loans arranged throughbrokers had a higher rate of misrepresentation.

And who represents the well-connected mortgage broking industrythe Mortgage and Finance Association of Australia?

Step forward one of the largest lobbying firms in the country, GRA Cosway,chaired by Helen Coonan, the very same chair of the Australian Financial Complaints Authority who put banks on notice regarding their arrogant indifference to regulatory and compliance risk and poor culture.

Moreover, GRA Coswaysclient listincludes a number of financial companies, a number of which are also members of AFCA.

There is AHL Investments, better known as Aussie Home Loans, which also offers personal loans.

Then there is PayPal Australia.The fintech group was the10th most-complainedabout company to AFCA in the eight months to June 30, 2019, according to publicly released data, with 833 complaints and a 58.3 per cent referral resolution rate.

Then there isPlenti, formerly called Ratesetter, which provides personal loans; and the small business lender Moula Money Pty Ltd.

What an extraordinary number of conflicts of interest Coonan has to manage.

As noted in an earlier article, in her chair role at Crown, she is a director of a company that directly benefits from making sure clients continue to have easy access to credit but also chairs the very organisation that rules on whether financial institutions are behaving irresponsibly in handing out credit.

Other financial-related companies represented by GRA Cosway include the litigation funderOmni Bridgewayand Sportsbet, and once included the financiers behind the collapse of Dick Smith.

While individual disputes obviously are not brought to the AFCA board, the role of chair is meant to be completely independent, especially when all the other directors come from industry and consumer backgrounds/experiences. Given the range of conflicts Coonan must manage in her role of chair of so many organisations with diametrically opposed interests, complete independence is not a description that could be applied to her as AFCA chair.

Coonan said thousands of consumers had felt badly let down by financial institutions as far back as the global financial crisis and that black-letter law arguments would not succeed if they delivered fundamentally unfair outcomes for consumers.

The public would probably feel badly let down by Coonan, and would also not be interested in black-letter law arguments about Chinese walls, for example.

With theAustralian Financial Reviewhaving called for Coonans resignation of AFCA, time will tell if she hears the message and realises her time is up as chairwoman of so many boards.