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Review of the Code of Banking Practice has now concluded

Review of the Code of Banking Practice has now concluded

The Independent Reviewer, Jan McClelland has concluded her Review of the Code of Banking Practice with the delivery of the Final Report.

In her Final Report, released on 16 December 2008, Ms McClelland urged Australian banks to include a clear commitment to “responsible lending” in the industry’s code of practice, including a commitment to carefully assess applications for credit that may result in financial hardship.

The recommendation on responsible lending is one of a number made by Ms McClelland, who also recommended that banks take a more proactive approach in identifying and helping customers facing financial difficulties at the earliest possible opportunity.

The report also recommends the full disclosure of “exception fees” by the banks, and that they provide information to customers on how to avoid such fees, which normally apply for overdrawn accounts.

The Code, which has been in place since the early 1990s, sets out the banking industry’s key commitments and obligations to customers on standards of practice, disclosure and principles of conduct for their banking services.

The review involved extensive consultations with a range of interested parties, including lenders, consumer groups, financial counsellors, representatives of industry and welfare bodies and regulators. The recommendations contained in the Final Report take into account best banking practices internationally, as well as specific comments and suggestions made by industry and consumer representatives.

The exhaustive consultation process allowed the industry as well as consumers and their representatives to make a wide range of suggestions on how the Code can be updated and improved for the benefit of not only customers but also the banking industry.

The Final Report of the review also recommends that the Code:

  • Formally recognise the role of financial counsellors in managing cases of financial hardship;
  • Include a new clause in the Code relating to Indigenous customers, including Indigenous cultural and community awareness training for staff operating in indigenous communities;
  • Clarify the roles of the Code Compliance Monitoring Committee and the Financial Services Ombudsman in relation to code compliance monitoring and dispute resolution respectively; and
  • Is readily accessible by consumers and written in language that is consumer friendly.

Ms McClelland thanked the many organisatons and individuals who contributed to the review.

Read the Final Report.

Contacting the Independent Review

The Independent Reviewer can be contacted by:

Mail:  Review of Code of Banking Practice
         P O Box 3419, GPO Sydney NSW 2001


Fax: 02 9879 6783

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