The bank and financial services royal commission has heard ANZ and funeral insurance companies targeting Aboriginal customers may have broken corporations and ASIC laws.

ANZ could find itself in hot water after commissioner Kenneth Hayne raised the prospect it may have broken the law over its punitive use of "informal" overdraft fees.

Counsel assisting the commission Rowena Orr, QC, said the funeral insurance companies — Aboriginal Community Benefit Fund (ACBF) and Select — had engaged misleading and deceptive conduct in advertising their products.

Select also faces the prospect of being pursued under the corporations act for providing unlicensed advice to customers.

ANZ breaches of bankers' code

In closing the commission hearings in Darwin, Mr Hayne sent a warning shot in ANZ's direction asking whether the bank had broken the law with its contentious policy of hitting Aboriginal customers with informal overdraft fees.

The informal overdrafts, or shadow limits, allow customers to draw out more money than they have in their account.

Opting out of the deal is at the sole discretion of ANZ.

The fees, which were buried in 104 pages of terms and conditions supplied by the ANZ, are accrued at up to $54 a month on overdrafts above $60.

The overdrafts also incur a penalty interest rate which is currently above 17 per cent.

The commission had earlier heard that ANZ had ignored the bankers' code of conduct stipulating banks could only access 10 per cent of welfare recipients' payments to pay off debt.

The bank was also accused of failing to promote its non-fee, basic Access account and pushing Aboriginal customers to more complex and expensive products.

Ms Orr said it was open to Mr Hayne to find a case of misconduct against ANZ for breaching the bankers' code of conduct by:

Failing to provide suitable accounts

Failing to provide suitable accounts Failing to assist its customers

Failing to assist its customers Failing to train its staff to be culturally aware of the needs of Aboriginal and Torres Straight Islander people

Ms Orr said ANZ failed to explain the availability of fee-free accounts to customers and instead opened different accounts which were inappropriate given the risk of high dishonour and overdrawn fees.

Funeral insurance laws face overhaul from the scandal

Mr Hayne was told it was also open to find that the marketing of funeral insurance by ACBF and Select breached numerous laws, and in once instance, ACBF has breached an existing Federal Court order over its marketing arrangements.

Select was alleged to have failed to inform ASIC it had been involved in significant breaches of the ASIC Act.

It was also alleged to have failed to give advice honestly, fairly and failed to take reasonable steps to comply with funeral protection laws.

Ms Orr said at the heart of the insurance companies' misconduct were cultural failings, remuneration schemes that rewarded sales and inadequate internal systems to police breaches.

She said ACBF in particular targeted vulnerable families and young customers, including children and infants, playing on the cultural significance of death in Indigenous communities.

Ms Orr said submissions would be called for with the aim of strengthening legal protections in the industry.

She also recommended the ASIC act should be amended to ensure funeral insurance should be classed as a "financial product".