On Nov. 17, AST ASIC released proposed revisions to banking code.
AST ASIC released Consultation paper 373 - proposed changes to the banking code of practice, which seeks stakeholder views on proposed changes to the AST BAC's Banking code of practice in response to an independent review of the code in 2021.
In addition, AST ASIC published 4 attachments to the consultation paper, listed below.
Follows AST BAC Sep. 2023 submitted proposed bank code to AST ASIC, see #181960.
Context
AST ASIC does not develop or administer the code; AST BAC is the owner of the code.
In addition, AST ASIC explained that its role is to consider whether or not to approve the code using AST ASIC's statutory powers and according to the relevant criteria.
It is not mandatory for industry codes to be submitted to AST ASIC for approval; AST ASIC’s approval signals code is one in which consumers, industry can have confidence.
Comparison, Proposed Code (Attachments 1-2)
Attachment 1 to CP 373: comparison of current code and proposed code provisions has table comparing provisions in current code with proposed code's equivalent provisions.
In addition, published Attachment 2 to CP 373: proposed banking code of practice, which contains a copy of the proposed code the AST BAC provided to AST ASIC.
Proposed Charter (Attachment 3)
Published Attachment 3 to CP 373: proposed BCCC charter; which is revised AST BCCC charter (proposed charter); while AST BCCC charter is related to code, it does not form part of code; is therefore not part of document that AST ASIC considers for approval.
However, because the charter contains information relating to AST ASIC's legislative approval criteria for compliance monitoring, it is relevant to AST ASIC's consideration of the code approval application and is included in AST ASIC's public consultation.
Proposed Customer Guide (Attachment 4)
In addition, AST ASIC published Attachment 4 to CP 373: proposed customer guide. which is a new customer-facing document titled Banking with confidence: your key rights and protections as a customer, which AST BAC has provided to AST ASIC.
The proposed customer guide does not form part of the code and is not a document that AST ASIC will consider for approval; however, AST ASIC is publishing proposed customer guide as part of its consult because it considers it will assist stakeholders.
Specifically, will assist in forming views on whether code strikes right balance in terms of weighing the goals of simplicity and avoidance of regulatory duplication against consumers’ ability to understand the rights that apply to their banking relationship.
AST ASIC Comments
This is first time AST ASIC has undertaken a public consult before making a decision on approving the code; AST ASIC said it is seeking to ensure the code continues to provide real benefits to consumers, small businesses, as well as subscribing banks.
Specifically, before deciding on whether or not to grant the final approval sought.
AST ASIC stated it seeks feedback as well as insights on the following key issues.
Whether or not the proposed code imposes obligations on subscribers that are beyond those required by the law and, in doing so, addresses key potential consumer harms.
In addition, whether the proposed code provides for effective administrative systems for monitoring compliance and whether the obligations are capable of being enforced.
Whether any code review recommendations that the AST BAC has not supported should be included in the proposed code; whether the recommendations accepted by the AST BAC are appropriately reflected in the proposed code and proposed charter.
Plus, whether proposed code strikes an appropriate balance between simplifying the code and minimizing regulatory duplication on the one hand, and promoting consumer awareness of protections applicable to their banking relationship on the other.
AST ASIC also seeks feedback and insights on key issue of role of industry guidelines.
Consultation paper states other key topics for consultation are enhancing guarantor protections; inclusive and accessible banking; customers experiencing vulnerability.
Next Steps
After AST ASIC's public consultation, AST ASIC will engage with AST BAC to seek any improvements to the proposed code, where appropriate; and it anticipates that the AST BAC will then lodge a formal application for AST ASIC's approval of the code.
AST ASIC explained that it will look to make decision on approving code in H1 2024.
Consultation End
The comment period for this consultation closes at 11:59pm AEDT on Jan. 15, 2024.
Mar. 2024 AST BCCC Response
On Mar. 7, 2024, AST BCCC issued Banking Code Compliance Committee submission: CP 373 proposed changes to the banking code of practice (of Jan. 15, 2024) re above.
Its submission focused on maintaining and enhancing critical consumer protections.
Including retention of existing protections for customers, like the diligent and prudent banker obligation for individuals; and implementation of key recommendations.
Specifically, from the 2021 Independent code review that achieves the intended objectives; and protection of AST BCCC's ability to operate independently, effectively.
AST BCCC said it believes that it is essential for the new code to retain important obligations for customer protections and that the obligations are clear for bank staff.
In addition, that the obligations are clear for customers and customer representatives.
Appendix 1 of submission provides overview of AST BCCC's response to the proposal, including recommendations to improve clarity and robustness of proposed code.
In addition, recommendations on code provisions removed as restatements of law; as well as recommendations regarding supporting an approach to code compliance.
Made recommendations with respect to amendments to proposed AST BCCC charter.
Other recommendations, including on clarifying role of industry guidelines; inclusive and accessible banking, customers experiencing vulnerability; handling complaints.
AST GVT issued explanatory statement re both instruments; explains that AST ASIC received 16 submissions, these were taken into account when making instruments.
AST ASIC engaged in code review process with targeted range of stakeholders to invite further feedback on new proposed code i.e. AST BCCC, AST AFCA, consumer reps; new code will commence Feb. 28, 2025; Mar. 2020 code approval revoked Feb. 28, 2025.
On Jun. 27, 2024, AST ASIC commented with respect to both of the instruments.
Said after a period of extensive AST ASIC-led consultation, AST BAC agreed to address critical gaps flagged by stakeholders, resulting in a strengthening of standards; in addition, a retention of key protections for consumers as well as small businesses.
Banks have a significant impact on our lives and Australians and AST ASIC rightly have high expectations of them; in coming weeks, AST ASIC will also release reports.
Namely, on Better banking for Indigenous Australians (#178392), credit card offerings, scam detection, prevention and response; the code and reports like these are a call for banks to continuously look at how they should be putting customer front and center.
AST ASIC expects BAC to continue working with members to consider opportunities to improve consumer outcomes through data insights, i.e. identification of consumers experiencing vulnerability, and customers identifying as First Nations consumers.
On same day, AST BAC commented; banks large and small, will begin making changes to their systems to meet new requirements, training staff ahead of code going live; revised AST BCCC charter, effective Feb. 28, 2025, will be issued shortly on BCCC site.
In addition, it welcomed AST ASIC's approval of new Banking code of practice above.
It also discussed added protections it would have liked to see in new code, including re vulnerability obligations; aims to ensure smooth transition on implementing new code.
The AST BCCC's focus in the coming months will be on aligning reporting requirements as well as guidance in order to support consistent practices with the new obligations.
Regulators
AST ASIC; AST BAC; AST BCCC; AST GVT
Entity Types
Bank; CNSM
Reference
PR 7/1/2024; Info, RF F2024L00782, F2024L00783, PR 24-136MR, 6/27/2024; PR 3/7/2024; Rsp 1/15/2024; CP 373, PR 23-306MR, 11/17/2023; ESG; Citation: ASIC corporations (revocation of approval of March 2020 Banking code of practice) instrument 2024/522; ASIC corporations (approval of February 2025 Banking code of practice) instrument 2024/523;
