ASIC Engages in Consultation on ABA’s Proposed Amendments to the Banking Code

ASIC Engages in Consultation on ABA’s Proposed Amendments to the Banking Code

4

ASIC has recently released Consultation Paper 373, seeking feedback on the proposed changes to the Banking Code of Practice by the Australian Banking Association (ABA).

The consultation process aims to gather insights and opinions on several key issues to help ASIC determine whether to approve the proposed Code. Areas of focus include:

1. Existence of Additional Obligations: Evaluating whether the proposed Code imposes obligations on subscribers that go beyond what the law requires. This exploration aims to address potential consumer harms.
2. Effective Administrative Systems: Assessing the adequacy of the proposed Code's administrative systems for monitoring compliance and its enforceability.
3. Inclusion of Code Review Recommendations: Determining whether any Code review recommendations that have not been supported by the ABA should be incorporated into the proposed Code.
4. Alignment with Accepted Recommendations: Examining the extent to which the recommendations accepted by the ABA are appropriately reflected in both the proposed Code and proposed Charter.
5. Balance between Simplicity and Consumer Protection: Assessing whether the proposed Code strikes the correct balance between simplifying the Code, reducing regulatory duplication, and promoting consumer awareness of their banking relationship safeguards.
6. Role of Industry Guidelines: Exploring the role of industry guidelines within the proposed Code.

Overview of the Proposed Changes

The ABA's proposed amendments to the Code encompass various aspects, aiming to enhance the banking experience for consumers. The key changes include:

• Extension of Obligations: Expanding the duty to exercise the care and skill of a diligent and prudent banker to loans unregulated by the National Credit Code.
• Guarantor Meeting: Introducing provisions mandating that reasonable steps be taken to ensure a meeting with a guarantor occurs before they sign their guarantee.
• Updated Definitions: Modifying the definitions of 'financial difficulty' and 'vulnerability' to better capture customers who anticipate future repayment challenges or those who may be vulnerable at any given time.
• Enhanced Customer Support: Incorporating new language and committing to referring customers to support services, such as interpreter and translation services, Auslan, National Relay Services, and accessible documentation, where appropriate and feasible.
• Expanded Small Business Coverage: Expanding the threshold for small businesses to access Code protections, increasing the upper limit of aggregate borrowings from $3 million to $5 million.

Published:Tuesday, 5th Dec 2023
Source: Paige Estritori

Share this news item:

Finance News

AMP's Transition Showcases Adviser-Centric Rebranding Strategy 03 Dec 2024: Paige Estritori AMP is undergoing a significant transformation, with a forthcoming rebrand of AMP Advice and AMP Financial Planning. Spearheaded by Matt Lawler, now CEO of what is tentatively called NewCo, this transition includes working closely with advisers to ensure their voices are essential in shaping the future of the brand. 'This process is set to be particularly democratic,' said Lawler, highlighting the collaborative approach. - read more

Reserve Bank Anticipates Significant Rate Reduction 03 Dec 2024: Paige Estritori The Reserve Bank of New Zealand is poised to decrease the official cash rate by a notable 50 basis points this week. This action comes on the heels of a cumulative 75 basis points reduction across the last two monetary policy discussions. - read more

RBA Board Overhaul Raises Questions 02 Dec 2024: Paige Estritori The recent decision to reconfigure the Reserve Bank of Australia's (RBA) leadership structure presents both opportunities and challenges, particularly in the ongoing battle against inflation. Dr. Shane Oliver, Chief Economist at AMP, has voiced concerns that easing inflation control measures could tarnish the bank's credibility. - read more

Finance Articles Creating a Bulletproof Budget: Tips for Australians Juggling Debts Creating a sturdy financial foundation is essential for Australians navigating the often turbulent waters of debt. A bulletproof budget does more than just track expenses; it acts as a buffer against unexpected financial downturns and provides a clear path toward financial freedom. Comprehending the full weight of this importance is the first step to turning one's financial destiny around. - read more The Role of Business Insurance in Protecting Your Australian Enterprise Starting and running a business in Australia can be an exhilarating experience, full of opportunities for growth and success. However, it also comes with its fair share of risks and uncertainties. From unexpected natural disasters to potential legal disputes, the threats to the sustainability of a business are ever-present. This is where business insurance becomes pivotal as a protective tool for Australian enterprises. It provides the much-needed safety net to help businesses mitigate potential losses and continue operations with confidence. - read more Debt Consolidation: How to Streamline Your Finances with a Personal Loan Debt consolidation is a strategy often utilized by individuals seeking to take control of their financial health. At its core, debt consolidation involves combining multiple debts into a single, more manageable loan, typically with more favorable terms such as a lower interest rate or a longer repayment period. - read more A Complete Guide to Caravan Financing: Securing Your Mobile Haven Caravans have surged in popularity across Australia, offering an unmatched fusion of comfort and mobility. This beloved mode of travel grants you the liberty to discover hidden gems off the beaten path while bringing along the comforts of home. With the rise of remote work and the enduring spirit of wanderlust, caravans provide a flexible lifestyle choice for adventurers, retirees, and families alike. - read more How to Improve Your Chances of Getting a Business Loan Approved Welcome, Australian entrepreneurs and business owners! Whether you're just setting down the foundation of a startup or steering a well-established enterprise, access to capital remains a critical ingredient for business growth and survival. In the bustling economy of Australia, a well-structured business loan can be the catalyst that propels your business forward, aiding in expansion, the acquisition of new equipment, or simply ensuring smooth operational cash flow during lean periods. - read more Online Loan Application Essentials: What to Know Before You Click Submit Welcome to the digital age, where online loans in Australia offer convenience and accessibility like never before. With a few clicks, financing for your next big purchase or consolidation of existing debts is at your fingertips. However, venturing into the world of online lending without a compass can leave you navigating choppy waters. - read more