COMPERE: The next block in remaking of the image of Australia's banking industry has been revealed today.
The 200 page report into the Banks Industry Code of Practice has been released with recommendations including a three month protocol for closing branches and better identification of cheap banking options for low income earners.
The Federal Government has welcomed the report and says the banks should start implementing the recommendations immediately but it seems that's about all the Government's prepared to do, with the Minister responsible, Joe Hockey, admitting that he can only write to the banks and urge them to take the initiative.
Shane McLeod reports:
SHANE McLEOD: Every three years under its self regulatory code the banking industry takes a good long hard look at itself and this time around independent consultant, Richard Viney, has released some significant discussion points on potential changes to the banking industry code.
David Bell is Chief Executive of the Bankers' Association and received the report today.
DAVID BELL: At this stage I've just got the report. It's 80 recommendations and 200 pages long, and there are lots and lots of things to be covered in our consultation with the community.
SHANE McLEOD: While David Bell hasn't had much time to look over the issues paper it seems the Minister for Financial Services and Regulation, Joe Hockey, has and he likes what he sees.
JOE HOCKEY: We will be writing to the banks urging them to adopt the recommendations as quickly as possible. With many of the recommendations there is no reason why the banks cannot adopt them as soon as possible.
SHANE McLEOD: But as for what he can actually force them to do it appears the answer is not too much.
JOE HOCKEY: No, the Government will be doing something. The Government will be encouraging the banks to move quickly on this report.
SHANE McLEOD: The review stretches over 200 pages with many of the 80 recommendations involving technical changes to the existing code, incorporating changed practices or technology.
Other recommendations are more far reaching like the incorporation of a three month protocol for the closure of bank branches. That protocol was recommended by a 1999 Parliamentary Committee Report into Regional Banking shared by Western Victorian Liberal MP, David Hawker.
DAVID HAWKER: It's disappointing that it's taken two years to get this response but nonetheless it's encouraging that four of the recommendations are taken directly from my Committee's report saying that the banks should consult more with the community before closing the branches.
Also very importantly to consult with the community to see how to make a branch more viable before just taking the one stop and just closing it and I think that's very important.
We made it very clear that the banks have a lot more to do than just closing branches when they feel that they're no longer viable on their terms and importantly of course bringing the community in, bringing in consultation.
SHANE McLEOD: Labor is labelling the Issues Paper a wasted opportunity.
Shadow Minister, Stephen Conroy says the review should have gone further prescribing disclosure of ATM fees and more transparent dealings on interest rates particularly on credit cards.
SENATOR CONROY: Look, codifying how they go about further withdrawing bank services is not what Labor's about in banking policy. We want to see services rolling out to people not explaining how they're going to be taken away further.
Yes, there are a couple of important initiatives in this package but it just misses the main point.
SHANE McLEOD: The Bankers' Association, David Bell, says the months ahead will be the chance for the public to have their say on the banking industry.
In parallel with the review of the code of banking practice the Bankers' Association is about to launch a widespread community consultation program.
David Bell admits that the Bank's public image has copped a hiding in recent years.
DAVID BELL: As you would appreciate it's a very detailed report. Some 200 pages, some 80 recommendations and it's very important that we absorb that, understand that, deal with it a holistic way, don't deal with it in a piecemeal way, and make sure we get it right.
SHANE McLEOD: Given that you are going through this process should you be encouraging your members to put a moratorium on things like branch closures until you get through this process?
DAVID BELL: I don't moratoriums are at all appropriate. We have a, you know, an open and competitive banking system in place which is actually working and I think we need to deal with this [indistinct] review in the appropriate fashion.
COMPERE: David Bell, Chief Executive of the Australian Bankers Association, ending that report by Shane McLeod.