What the new banking code of conduct will do for you

The banks are on a mission to restore faith in a battered sector.

What new bank code will do for you

The banking industry’s fall from grace as the royal commission revealed a plethora of dodgy practices was swift. Trust was eroded, some heads rolled, business practices were reviewed. One of the industry’s responses was an Australian Banking Association (ABA) code of practice, approved by the Australian Securities and Investments Commission (ASIC).

Reporting of the new code was littered with weighty words – “extensive engagement”, “comprehensive independent review”, “extensive stakeholder consultation”, “significant changes”, but it may still be a long way back before trust is restored.

Results from a new Roy Morgan survey show that bank customers are less likely to recommend their bank than they were before the royal commission.

In February, 59 per cent of customers were highly likely to recommend their bank to a friend or colleague. That figure fell to 54.4 per cent by June and is at its lowest monthly level since November 2016.

What’s in the code for you?
The code, which starts from 1 July next year, promises:

  • provisions for inclusive and accessible banking, including for vulnerable customers
  • protections around the sale of consumer credit insurance
  • protections for guarantors of loans
  • reminders for credit card customers that promotional periods for balance transfer are about to end
  • better processes to assist customers in financial difficulty and to resolve complaints.

And what has been overlooked?
Consumer Action Law Centre (CALC) chief executive Gerard Brody described the code as positive, but said there were shortcomings, included not taking further action to limit penalty fees for such things as late credit card late payments.

“These fees can drain people's accounts, meaning they don't have enough to live on,” he told the ABC.

He said banks should ensure that credit card limits are repayable over two years rather than the five years the ABA proposes.

He was also concerned about compliance with the code.

It is to be administered and enforced by an independent monitoring body, the Banking Code Compliance Committee (BCCC), but Mr Brody said sufficient resources had to be provided to allow this to occur.

“Many of the case studies at the royal commission involved breaches of the code,” he said, “but the existing processes haven't identified and stopped these from occurring.”

Will the code help restore your trust in the banks? Does it go far enough?



    To make a comment, please register or login
    Not a Bludger
    2nd Aug 2018
    Another load of beauracratic nonsense - and another picnic day for another load of lawyers.
    2nd Aug 2018
    Not really.
    We'll see if this issue will result in better behaviour from banks or more of the same once the dust settles.
    The real issue is not legislation. It is the prosecution of companies which know they can get away with crooked behaviour. We not too long ago had phone and internet disconnected by Optus, which refused to put it back on for 2 months and just wanted us to go away. This is the well worn path because big business knows full well that we do not have a real regulator any more and that legislation can simply be ignored. You can't fight the big end of town and without media and legislative clout they win. That is the track record and I suggest that after a couple of years the banks will again start to slacken off. Think GFC and what American banks did after that. Now worse than ever. We will be the same.
    Not a Bludger
    2nd Aug 2018
    OMG - Mick has popped up again - time to tell the truth Mick and admit that you represent YLI’s partner Getup.
    Old Geezer
    2nd Aug 2018
    Mick banks will do the same but just a bit differently to comply with latest restraints at the cost of their customers.
    2nd Aug 2018
    Mick I seen your comment regarding Optus, I am with Optus and would be interested in the outcome, it sounds like you were put through the mill. I agree with your comments on the new banking codes, and unless they are closely monitored they will come up with another way to rip customers off. I don’t no if things have changed with the commonwealth bank, but quite a few years ago I got a letter from the bank regarding an account that I hadn’t updated for a while, when I took the book in I was amazed to listen to the book being updated, when the book was handed back there was about a dozen entries, I was charged $37 for what ammounted to about 3 minutes work on there part, when I quizzed the teller she told me there was a charge for each entry, after getting no satisfaction from the manager I immediately closed the account.
    pedro the swift
    2nd Aug 2018
    Banking code of conduct??? Dreamed up by the banks?? I suggest it should be called the Banking Code of Con.
    How many of the bank heads who managed all these ripoffs will actually be fined or jailed for ripping people off. Why does ASIC not have powers to prosecute properly instead of just being a paper tiger.
    Old Geezer
    2nd Aug 2018
    All it will do will cost people more to do their banking.
    2nd Aug 2018
    agree 100%

    2nd Aug 2018
    Reporting of the new code was littered with weighty words – “extensive engagement”, “comprehensive independent review”, “extensive stakeholder consultation”, “significant changes”.......

    What is wrong with the above quote? It's full of subjective words which look good but are meaningless. It is hoped that there is no new code but, instead, a new set of regulations. In NSW a government brought in a system to improve female participation in the workforce, called it a fancy name, Affirmative Action, gave the participants discounts on things like electricity and told us all how good it was. What happened to the companies that didn't follow the rules? They were named in parliament but kept the discounts. If there is a code brought in rather than legislation, banks will be able to apologise which will cost them nothing whereas a breach of the law could cost them the licence to carry on their business.
    2nd Aug 2018
    Yet another self regulation "Code" disasters in the making.

    The (robber barons) banks have been given a free Get Out Of Jail card by this government (again)

    We never learn from history. We are doomed to let others make the same mistakes at our detriment.
    2nd Aug 2018
    Bit premature with the criticism GrayComputing. The government has nothing to do with this new code which has been put forward by the Australian Banking Association (ABA). The ruling body, Australian Securities and Investments Commission (ASIC) has approved it, not the government.

    The Royal Commission is still ongoing and will issue a report and recommendations in due course to the government who will then take whatever action they consider necessary. Save your comments until then as I'm sure with your unbiased attitude that the government will not meet your ideals.

    2nd Aug 2018
    The new code is excellent.
    Now we can stop the bank bashing. Bank executives will ensure that all staff abide by this code and all will be well :)
    Bring on the RC into Industry & Retail Super I say - stop the rorting and thieving from the poor masses
    Old Geezer
    2nd Aug 2018
    I too are over bank bashing and people blaming banks for their own greed. Banks do a wonderful job and it is thanks to banks that I have the wealth I do today.
    2nd Aug 2018
    I don't have the wealth to-day, however I am wealthier to-day then before pedro the swift was born, come back next year at the same time and argue the enormous improvements this so called banking royal commission has had on the welfare on those who relied on becoming home owners through the banking institutions, renting is on the up and up, yet after all that is putting money into those who had the capital buying the houses, by next year it will be impossible for many to ever own their own home, banks will need 20% deposit for even considering a housing loan regardless of the income of both partners, yet here is pedro the swift? asking to indict people selling their home, house, at their price, as far as I am concerned, pedro, give your house away for free before you put any regulations on the sale of houses and then maybe you might have a cause to complain.
    this banking royal commission has been one of the greatest cons ever put over the Australian population, yet we keep on believing it was the greatest invention since sliced bread and yes amp lost some capital, have a look now, most has been redeemed, the big banks are still down a bit, yet no panic selling has taken place, why, you are the fools who are energising the storm in a teacup,
    2nd Aug 2018
    Olbaid bank bashing more like customer bashing you must be a tragic Liberal supporter to make a statement like that can't you read.
    2nd Aug 2018
    I can read floss. I have voted labor and liberal depending on thier policies at the time and their leadership.

    A lot of the negatove comments about banks and corporations is just that - uninformed and often polkitically motivated bashing

    On a brighter note, hope the LNP get the company tax cuts signed off. Just look at what the tax cuts have done for the US
    Record GDP growth of 4.1% p.a. Company earnings up 20% on average

    If only we had such far sighted politicians here in Oz
    Old Geezer
    2nd Aug 2018
    Floss you don't have to use banks> just ask Centrelink for a cheque instead and cash it on the black market for 50 cents in the dollar.
    pedro the swift
    2nd Aug 2018
    So the BCCC(yet to be formed) will administer and "enforce" the so-called new code? I 'm willing to bet it will consist of "mates" from the banks. Self-regulation in this industry does not and will not work for the good of customers. Proven time and again with "self-regulating". And note, OG, people do have to use banks since years ago people were forced to be paid via bank accounts. That was a great coup for the banks, wasn't it. I am willing to bet they had great hand in implementing that.
    2nd Aug 2018
    pedro, pedro, when will you wake up? where is the donkey who assisted you so faithfully
    3rd Aug 2018
    A code of conduct simply diverts the eyes of the legislator away from actually legislating. To be a respected industry you don't aspire to ideals you live them.

    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles