The Minister for Financial Services & Regulation, the Hon Joe Hockey MP, today called on the banks to start responding immediately to the Issues Paper prepared by Mr Richard Viney on the review of the Code of Banking Practice.
"This is an important paper that lays down some excellent iniatives for improving bank services in Australia
"Key recommendations like ensuring credit limits are suited to a customers capacity to repay and properly informing guarantors of their rights should be implemented immediately'
"I also welcome a 3 month community consultation period before a regional or rural branch is closed as a step towards better customer management across Australia.
The Minister particularly supported the recommendation for better information on low cost bank accounts and went further by calling on the banks to develop more low cost accounts for those most needy in our community
Other recommendations covering small business disputes, transaction fees, chargeback rights, direct debits and dispute resolution should also be implemented.
The Minister noted the Mr Viney was appointed by the banks to conduct this review "Mr Viney is to be congratulated for producing a fearless report that addresses key issues for consumers".
The Minister emphasised the importance for the banking industry to respond positively to the matters raised by Mr Viney and that the Government would be closely monitoring the industry response.
"The Issues Paper presents the banking industry with an excellent opportunity to demonstrate its willingness to address customer concerns. We will be watching their response.
"Its good that Australian banks are profitable and successful and now they have the opportunity to give something back to their customers and not just their shareholders.
5 March 2001
Media contact: Matthew Abbott, Minister's office, 02 6277 7230, 0413 076 213
Further information: www.joehockey.com
Recommendations of the Issues Paper of the Viney Review of the Banking Code of Conduct
- The Banking Code be amended to include a branch closure protocol for regional and rural Australia based on recommendation 20 of the Hawker Report.
- The Banking Code should require banks to provide details of their accounts that are most suitable to low income or disadvantaged persons.
- Whether the Banking Code should ‘flesh out’ the necessary detail for the Product Disclosure Statements (PDS) under the proposed Financial Services Reform (FSR) Bill
Other Interim recommendations
- Other Interim recommendations include:
- That the Code incorporate a principle of ‘fairness’.
- The operation of the Code be extended to small businesses and that the Code define ‘small business’ in the same terms as FSR defines ‘retail client’.
- The Code provide for an organisation, ABIO Council or ASIC, which will administer the Code and monitor and report on compliance with the Code by subscribing banks.
- The Code establish a forum for regular exchange of views between banks and consumer advisers on banking issues.
- Shadow ledgers – banks automatically provide customers in default with statements of account as it the account were not in default.
- Credit assessment – that the Code contain a provision requiring banks to satisfy itself that the level of credit are suited to the customers stated financial needs and within the customer’s capacity to repay.
- Direct debits – that the Code provide for a direct debit guarantee with the features of the UK guarantee.
- Chargebacks – that the Code require a bank to ensure that the terms and conditions of use of any credit card include general information of the existence and operation of chargeback rights.
- Guarantees – provision of information to guarantors including advice about the operation of the guarantee and that banks be obliged to advise guarantors to seek financial advice.
- Requirements relating to internal and external dispute resolution.
Provision relating to electronic communication