ABA CEO Anna Bligh said the proposal for the new code aims to provide “significant extra safeguards” to banking customers.
“The current Banking Code is the only Code in the financial services sector with ASIC approval and the industry is determined to maintain these high standards,” Ms Bligh said.
The Code is now submitted to the Australian Securities and Investments Commission, which will undertake its own consultation with relevant industry stakeholders as part of its approval process.
The new Code is expected to take effect in early 2024.
Here are the added protections stated in the proposal:
- The definition for small businesses will be expanded, allowing for additional 10,000 small businesses to be covered under the proposed code.
- Banks will be required to reach out with customers intending to act as guarantor to help them understand their obligations.
- A new definition of vulnerable customer will acknowledge anyone can face vulnerability at any point in their life due to significant life-changing events such as the loss of a partner, unemployment, or illness.
- There will be a commitment to organise or refer customers to free support services such as interpreters, AUSLAN, and National Relay Services.
- There will be improved clarity regarding the various forms of support accessible to all customers, encompassing financial assistance alternatives tailored to the needs of small businesses.
- An updated section on inclusive and accessible banking will be introduced, which will recognise that banking services should be inclusive of people with diverse sexual orientations and gender identities.
Ms Bligh said ABA will also prepare a new customer guide, which will inform customers about banking protections provided under the Australian law and how financial institutions can access and enforce the protections along with the existing code.
“Banks are committed to using simpler language for customers to understand how the Code protects them,” she said.
The proposal is also part meant to streamline and simplify the Code — since it was last updated in 2019, there are now additional 1,175 pages of legislation and regulations applying to the banking sector.
“The ABA has taken this opportunity to strike the right balance between creating new protections and removing parts of the Code that were either already in law or have been recently superseded by new legislation,” Ms Bligh said.
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