Consumer advocates are welcoming the revised Banking Code of Practice (the Banking Code) announced today which includes some incremental improvements to consumer protections.
Consumer Action Law Centre CEO Stephanie Tonkin said the Hayne Royal Commission exposed the massive harms that unregulated banking activity and other poor banking practices can lead to for ordinary Australians, but it has been an unnecessarily difficult and resource intensive process for consumer groups over four years to keep hard fought for protections in place.
“I am glad that the Banking Code landed with most of its consumer protections intact despite the fight to keep and enhance these consumer protections being a long-drawn out and arduous process.”
“Consumer protections against financial harm are important, we shouldn’t have to struggle so hard with the banking sector to keep them,” Ms. Tonkin said.
“We have had to prepare multiple submissions, attend dozens of consultations, take part in an additional consultation with the Australian Securities and Investment Commission (ASIC) and push back hard against the Australian Banking Association’s (ABA) attempts to claw back oversight of the Banking Code Compliance Committee (BCCC) of key protections for bank customers citing ‘de-duplication”.
Ms. Tonkin said the impact of the cost-of-living crisis as evidenced by increasing number of callers to the National Debt Helpline citing mortgage stress and difficulties accessing bank hardship clearly proves the importance of the strongest consumer protections in the Banking Code.
Karen Cox, CEO Financial Rights Legal Centre said:
“It is great to see the banking industry reinstate important consumer protections in the Code following the ASIC consultation process, such as the diligent and prudent banker clause. They have clearly heard the message that compliance with the law is not always enough. People have not forgotten the Royal Commission and they expect banks to be vigilant about policing the standards the community expects.
“It is clear from this process that the enforceable code regime that was introduced after the Royal Commission is dead on arrival. The ABA did not nominate any clauses to be enforceable by statute, and ASIC have approved the code with no enforceable clauses. The regime was poorly designed from the start and has had little if any effect to date. It is clear that the regime really needs a re-think.”
See a copy of ASIC’s media release and the speech by ASIC Chair Joe Longo at the Australian Banking Association (ABA) Conference, 27 June 2024.
