The National Australia Bank Ltd (ASX: NAB) share price will be on watch tomorrow following a late announcement on Wednesday.
What did NAB announce?
This afternoon the banking giant provided an update on the class action brought against it by Slater & Gordon Limited (ASX: SGH). This relates to the sale of Consumer Credit Insurance (CCI).
According to the release, NAB has agreed to settle the class action for $49.5 million. Though, it remains subject to Federal Court approval.
What was the class action?
This class action commenced in September 2018 against NAB and MLC in the Federal Court. It related to the sale of two CCI products. These were NAB Credit Card Cover and NAB Personal Loan Cover.
The claim is based upon allegations that NAB and MLC engaged in unconscionable conduct by selling CCI to persons who were either ineligible to claim on the insurance policy or highly unlikely to benefit from it.
It also alleged that NAB engaged in misleading and deceptive conduct in relation to the way CCI was sold to persons.
"The right thing to do"
NAB's Chief Legal and Commercial Counsel, Sharon Cook, explained that settling the class action was "the right thing to do for our customers and shareholders."
She added: "As we have said, we can only move forward if we deal with the past, so that we can earn trust among customers and the broader community and grow confidence in the future of NAB. It is important to note NAB no longer sells CCI products through any of its banking channels, and has implemented a remediation program for CCI customers."
NAB wasn't the only bank in the news today. The Westpac Banking Corp (ASX: WBC) share price was out of form and fell over 3% on Wednesday.
The catalyst for this was news that AUSTRAC is launching civil proceedings against it. This is in relation to alleged contraventions of its obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act.
