Making it easier for vulnerable customers to access fee-free banking
Access to fee-free ‘basic bank accounts’ are an important support for vulnerable banking customers. In light of the harm banking fees can cause for low-income and vulnerable consumers, Commissioner Hayne specifically recommended in the Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry that the Australian Banking Association (ABA) Banking Code (the ‘Banking Code’) be amended so that:
- “…without prior express agreement with the customer, banks will not allow informal overdrafts on basic accounts; and
- banks will not charge dishonour fees on basic accounts” (Recommendation 1.8).
In our joint submission with Financial Rights Legal Centre and Financial Counselling Australia to the Australian Competition and Consumer Commission (ACCC) Draft Determination AA1000441 – Australian Banking Association application for authorisation of certain amendments to the 2019 Banking Code, we strongly support the ACCC’s proposed conditions for authorisation of the related draft Banking Code changes. The conditions will also help ensure Code revisions align more closely to the intent of the Banking Royal Commission recommendations on basic bank accounts.
Additionally, we emphasise that customers who are eligible to receive basic bank accounts must be able to easily access them. The data reporting requirements proposed by the ACCC will lead to transparency and improved access to basic bank accounts for people who would benefit from them.
You can read the full submission here [PDF].