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Revised Code of Banking Practice

Focus: Key changes in the revised Code of Banking Practice
Services: Dispute resolution & litigation, Financial services
Industry Focus: Financial services
Date: 07 February 2013
Author: Alexandra Kirby, Paralegal & Emma Hodgman, Partner

The revised Code of Banking Practice has been published. Subscribing banks have 12 months to make changes to ensure compliance with the revised Code by 1 February 2014.


Key Changes

 
The key changes to the Code include:

Provisions for customers in remote Indigenous communities: Clause 8
 
Banks must take reasonable steps to:
  • make information about relevant banking services available in an accessible manner
  • provide details of accounts that may be suitable
  • assist customers to meet identification requirements
  • appropriately train staff to be culturally aware
  • consider government programs that may be relevant in providing banking services to remote indigenous communities.
Reminder to mortgagee about insurance obligations: Clause 12.6
 
Customers with a mortgage on a primary place of residence or residential investment property are required to be sent an annual reminder regarding their insurance obligations.

Account suitability: Clause 16.3
 
Banks must provide information about accounts with low standard fees and charges to an existing or prospective client if, in the course of dealing, the bank becomes aware that they are the holder of a:
  • Commonwealth Seniors Health Card
  • Health Care Card
  • Pensioner Concession Card.
Written notice to small business: Clause 20.4
 
Small business customers are required to be given 10 business days’ written notice of materially adverse changes to the terms of their credit facility.
Note: If the change also applies to the facilities of other small businesses, notice is not required. Also a shorter notice period may be required to avoid or reduce an increase in the bank’s credit risk.

Provision of information regarding chargeback rights: Clause 22
 
Banks must clarify the existence of chargeback rights for disputed transactions on relevant debit cards, including debits under recurrent payment arrangements.

Expansion of financial hardship provisions: Clause 28
 
Banks must commit to:
  • dealing with an authorised financial counsellor or representative on request
  • providing a written response, with reasons, to a request for assistance
  • including information about processes for dealing with financial difficulty (including contact numbers) on bank websites.
Definition of commercial asset financing guarantor: Clause 31.15
 
The definition of a commercial asset financing guarantor has been widened. Some guarantors will no longer get the full benefit of the Code provisions.

Debt collection provisions: Clause 32
 
Banks must:
  • comply with the ACCC and ASIC Debt Collection Guidelines
  • only sell debts to third parties who agree to comply with the Debt Collection Guidelines
  • not assign a debt when a bank is actively considering whether a customer is in financial difficulty or while a debtor is complying with an arrangement which has been agreed upon in relation to the debt.
Restriction of powers of the Code Compliance Monitoring Committee (CCMC): Clause 36(b)
 
The CCMC will no longer be able to investigate or report breaches of a key commitment and a general obligation to comply with relevant laws, unless those breaches are also breaches of another provision of the Code.

Please see below a copy of the revised Code.
 
For more information, please contact:

Emma Hodgman | Partner

T +61 2 8233 9650

F +61 2 8233 9555

E emma.hodgman@dibbsbarker.com

The information in this document, broadcast or communication is provided for general guidance only. It is not legal advice, and should not be used as a substitute for consultation with professional legal or other advisors. No warranty is given to the correctness of the information contained in this document, broadcast or communication or its suitability for use by you. To the fullest extent permitted by law, no liability is accepted by DibbsBarker for any statement or opinion, or for an error or omission or for any loss or damage suffered as a result of reliance on or use by any person of any material in the document, broadcast or communication.
 
This publication is copyright. Apart from any use as permitted under the Copyright Act 1968, it may only be reproduced for internal business purposes, and may not otherwise be copied, adapted, amended, published, communicated or otherwise made available to third parties, in whole or in part, in any form or by any means, without the prior written consent of DibbsBarker.
 
 

Copy of Code of Banking Practice
Author: Australian Bankers' Association Inc.
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