7 February 2020
The Australian Banking Association has today partnered with Business SA to brief the local business community and stakeholders on the rights and protections contained in the new Banking Code of Practice.
In force since July 1 last year, the new ASIC-approved Banking Code of Practice contains a big step up in protections for customers.
Under the new Banking Code of Practice, banks no longer:
- Offer unsolicited credit card limit increases
- Charge commissions on Lenders Mortgage Insurance
- Sell insurance with credit cards and personal loans at the point of sale.
Under the new Code banks must:
- Offer low-fee or no-fee accounts to low income customers
- Have a 3 day grace period on all guarantees to give guarantors enough time to make sure it’s the right option for them
- Actively promote low-fee or no-fee accounts to low income customers
- Provide reminders when introductory offers on credit cards end
- Provide simpler and fairer loan contracts for small business using plain English that avoids legal jargon
- Provide customers a list of direct debits and recurring payments to make it easier to switch banks.
“Banks have listened to community concerns and released a new rule book for banks, the Banking Code of Practice, which is a major step up in protections for customers.”
The briefing will outline the support on offer for customers and businesses who have been affected by the recent bushfires. Anyone affected is encouraged to contact their bank to access the support they need.
The ABA will also brief the business community on the ‘financing your small business’ website designed as a ‘step by step’ guide on applying for finance.
CEO of the Australian Banking Association Anna Bligh said “small businesses are the lifeblood of local economies, providing jobs and services across the community.
“Banks have listened to community concerns and released a new rule book for banks, the Banking Code of Practice, which is a major step up in protections for customers.
“Today is also an important opportunity to hear from local businesses directly as there’s no substitute for talking face to face and hearing about issues firsthand,” she said.
Martin Haese, Business SA CEO said “Business SA welcomes the details announced in the new Banking Code of Practice and supports the changes which should help businesses to operate more efficiently, perform better and grow.”
Contact: Rory Grant 0475 741 007
Read more about the new Banking Code
Access to credit opens up opportunities and fulfills aspirations. Getting it right requires the right balance between consumer protections and the flow of credit.
Interviewed by AM’s Peter Ryan, ABA CEO Anna Bligh talked about the substantial drop in loan deferrals since their peak during the pandemic, falling from 900,000 to 300,000.