Australia upfront for better banking outback
People living in remote areas of Australia or with basic bank accounts will receive new protections under a revamped “Banking Code of Practice”.
Australia’s regulation overhaul will see more fair and consumer-focused banking.
The Australian Banking Association (ABA) has set out its new code – and says its recommendations are a result of last month’s final report from the Royal Commission.
At that time, Australia’s Treasurer Josh Frydenberg said the government agreed to take action on all 76 recommendations made by Commissioner Kenneth Hayne QC, and plans to focus on “restoring trust” in the financial system Down Under.
Frydenberg said the banking sector “must change and change forever”.
In the latest chapter, the new code, approved by the Australian Securities and Investments Commission (ASIC) last year, introduces a range of new measures to make banking products easier to understand and more customer focused.
ABA’s CEO Anna Bligh says: “The Royal Commission Final Report is the industry’s roadmap for earning back the trust of the Australian people.”
The code itself is currently enforceable through the courts and the Australian Financial Complaints Authority as it forms part of a customer’s contract with their bank.
Of the 76 recommendations, 29 apply to banks, seven to be taken forward by ABA, with the remaining to be implemented by regulators and government.
ABA says the code represents a stronger commitment to ethical behaviour, responsible lending, greater financial protection and increased transparency.
Among the recommendations that ABA will take forward – they include abolishing dishonour fees on basic bank accounts; and amending the code to end charging default interest in areas declared to be affected by drought or other natural disasters.
In addition, ABA wants banks that work with customers in remote areas or who have limited English to identify ways for them to undertake their banking.
ABA has addressed concerns that this recommendation may have a material impact on access to credit for small business borrowers.
In finalising the industry position on this recommendation, ABA members will model the impact on their own customers and consult with treasury, regulators and small business groups.
