ABA CEO Anna Bligh on new Banking Code of Practice: transcript of interview on ABC RN Breakfast with Sally Sara

Sally Sara (Host): Australian banks will today come under a new code of practice that aims to strengthen protections for customers who are suffering financial hardship and small businesses as well. The new code, which comes into effect today, is the culmination of a long running review and has been drafted after extensive consultation with consumer representatives, small business and regulators. Essentially, it’s a rule book that banks must follow when dealing with customers. Anna Bligh is the CEO of the Australian Banking Association, and joins me now. Anna Bligh, welcome back to breakfast.

Anna Bligh (Guest): Good morning. Sally.

Sally Sara: Tell us about this new code of practice. How is it different from the previous iteration?

Anna Bligh: Thank you, Sally. The Banking Code of Practice is a really important, as you say, rule book for bank staff to make sure that they are providing the best service levels that they can. It provides new protections for people who might be thinking about going guarantor on a loan, for a partner or for a friend or for their adult son or daughter. It provides, importantly, a new definition of small business, which will give some 10,000 more small businesses protections under the code. It’s probably not well known, but small businesses are not covered by the responsible lending laws. So, these provisions in the code, are really the only protections that small businesses have if mistakes are made in lending decisions. So, it’s a very important additional protection to those 10,000 small businesses out there who previously didn’t have those protections. It also puts an enforceable obligation on banks to provide interpreters or to get interpreters for someone who needs that. If you think about the sorts of things that people sign off on in banks, I think it’s really important that if English is not their first language, they really do understand the sort of commitment that they’re making or the things they’re signing up for.

Sally Sara: Is this code of practice? Is it mandatory and is it enforceable?

Anna Bligh: It’s both. It’s mandatory for banks who are members of the Banking Association to sign up to it, and then it has been tested a number of times in the courts. Now, most people are not in the position to take their bank to court, but the Australian Financial Complaints Authority uses the banking code when they are hearing disputes and complaints by customers, so if a customer believes that the code has been breached in their circumstance, they can go to AFCA the financial complaints authority. That’s a free service, and that authority can order the bank to reimburse a customer or to change a decision, depending on the nature of the complaint, they have quite broad powers. So overwhelmingly, customers enforce the code through that complaints authority, but if they wanted to, they can take it to the courts, and the courts have in the past, ruled that the provisions of the code effectively are part of your contract.

Sally Sara: So for someone in financial difficulty, which some Australians are well and truly in at the moment, how will this code change the way that the bank treats them?

Anna Bligh: This code puts in place much clearer steps that bank staff have to follow if somebody is experiencing financial difficulty. So if you call your bank, or you go and see your bank and you tell them that you’re having trouble making ends meet, that you’re worried that you can’t make your loan payments, banks, then have an obligation to sit down with you and to work out a way through it, that is particular for your circumstances. So, it’s very much about identifying when people are in trouble, trying to be as proactive as you can about that. If you can see that people are having difficulty, reach out to them. But if a customer comes to the bank, then this code spells out in very clear steps what bank staff are obliged to do to help those customers. And then, as you say, if they don’t do that, the customer has a right to a complaint that’s then enforceable.

Sally Sara: Howdo customers have these kinds of interactions with their bank and looking for assistance and so on, when branches are closing at a rapid rate, and particularly in rural and regional Australia, people need to drive long distances to get in contact with their bank and a lot of the online services, they’re sometimes not fully accessible because of poor internet connectivity.

Anna Bligh: All banks have, call centres with complaint lines. There are numerous ways that customers can access and can communicate with their bank. They can old fashioned write a letter, they can make a phone call. Those call centres are fully staffed to hear complaints, and they’re obliged to register those complaints. They can go into a branch where there is a branch, and they can go online.

Banks do have online areas on their online systems where people can lodge a complaint or a concern. There are 10s of 1000s of Australians who work in Australia’s banks, and from time to time, they make mistakes, and it’s really important that when that happens, customers have a right to make a complaint, to have the complaint heard fairly. And if they’re not happy with the bank’s decision to have an external body that they can go to make the complaint and have that heard outside of the bank. But this code is about lifting performance and lifting standards even further. Australian banks are highly regulated by legislation, but this code is in addition to the things that are set out in the law, and it’s a way of banks holding themselves accountable. You know, there are many professions that have codes of behaviour and conduct, and they’re an important part of the regulatory landscape. They don’t cover the field and not to replace the law, but they are a really important part of keeping customers safe.

Sally Sara: Anna Bligh, thank you for your time this morning. Anna Bligh is the outgoing CEO of the Australian Banking Association.

Ends

Anna BlighBanking CodeBanking support