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Our submission provides feedback on the Australian Banking Association’s (ABA) updated Banking Code of Practice (Code). This is a joint submission made on behalf of:

• Consumer Action Law Centre
• Financial Rights Legal Centre
• Financial Counselling Australia
• Consumer Credit Legal Service
• COTA Australia
• South East Community Links
• Indigenous Consumer Assistance Network
• WEstjustice
• Mortgage Stress Victoria
• Uniting Communities Consumer Credit Law Centre SA

Our organisations have been involved throughout the review of the Code over the last two years. We made a joint submission to the original independent review (Independent Review) and have engaged with the ABA about the updated Code regularly since.

In our view, the new Code disappointingly does not offer many substantial enhancements to the protections it provides customers, compared with the current Code. The main goal of the ABA through the review has been to reduce the reporting obligations on, and oversight of, member banks. This is a bad outcome for consumers.

This submission responds to Consultation Paper 373 (CP373) with primary focus on the key changes to the Code amounting to reductions in consumer protections that we are most concerned about, particularly:

• The removal of the commitment in the current code to the clause 49 diligent and prudent banker obligation in regard to general consumer lending. We are concerned this will lead to a significant loss in practical
  oversight of a key area of banking (and in an area where breaches of the current Code are common); and
• The removal of the clauses referring to the complaint and IDR processes. We are concerned that not all of these processes are contained in law or regulatory guidance, and their removal significantly reduces the
  value of the Code as a public facing document.

A summary of recommendations is available at Appendix A.

Read the full submission (PDF).