The CCMC Bulletin 19 – June 2016

Welcome to Issue 19 of The Bulletin.

Review of the Code of Banking Practice and the CCMC

On 21 April 2016, the Australian Bankers’ Association (ABA) announced that it would implement comprehensive new measures to protect consumer interests, increase transparency and accountability and build trust and confidence in banks.

As one of these measures, the ABA has brought forward the review of the Code of Banking Practice. The review is expected to be completed by 31 December 2016.

In accordance with its Mandate, the CCMC will arrange and support a review of its own activities to coincide with the review of the Code by the ABA.

Further announcements regarding these reviews and the appointment of a reviewer are expected to be made by mid July 2016.

The CCMC’s 2016–17 Work Plan

We have published our Work Plan for 2016–17.

During 2016–17 our priorities are to:

  • arrange a review of the CCMC’s activities to coincide with the review of the Code by the ABA
  • implement any recommendations of the review, and
  • conduct an inquiry into an area of code compliance.

Provision of credit Own Motion Inquiry

We have commenced our Inquiry into the provision of credit obligations under the Code. The Inquiry is focused on unsecured lending (including credit cards) and banks’ use of automated systems to process applications for credit.

The objective of the Inquiry is to ensure that banks have in place robust processes and procedures to act as a diligent and prudent banker in their provision of credit to consumers.

We expect to publish our findings and any recommendations later in 2016. More information about CCMC Inquiries is available on the CCMC website.

2016 Annual Compliance Statement

The Annual Compliance Statement (ACS) has been distributed to banks for them to report on compliance with the Code between 1 July 2015 and 30 June 2016. Through the ACS program we seek to understand:

    • banks’ compliance with their obligations under the Code
    • areas of emerging code compliance risk, and
    • initiatives banks have taken to improve their compliance with the Code.

The outcomes, including any emerging risks and identified good industry practice, will be highlighted in the CCMC’s Annual Report for 2015–16, which will be published in December 2016.

The outcomes of the ACS program from previous years can be found in the CCMC’s Annual Reports.

Investigations – key statistics

Between 1 March 2016 and 31 May 2016 we:

  • Received seven new matters, which raised 10 allegations of non-compliance with the Code. Half of these allegations related to the provision of credit obligations.
  • Finalised 11 matters (seven by delegated decision), including:
      • one where the CCMC made a determination that a bank breached the provision of credit obligations under the Code
      • two where a bank agreed to self-report breaches of the internal dispute resolution, terms and conditions and direct debits obligations under the Code
      • one where another bank agreed to self-report a breach of its internal dispute resolution obligations
      • two where we found there had not been a breach of the Code
      • two which were outside of the CCMC’s jurisdiction due to the ‘12 month rule’
      • two where we received no further contact from the person making the allegation, and
      • one where the consumer withdrew their code breach allegation.

Further information about delegated decisions can be found in Guidance Notes 2, 3, 5 and 6.

Stakeholder engagement

On 20 April 2016, CCMC staff met with the Australian Securities and Investments Commission (ASIC) to discuss its Indigenous Outreach Program and the activities being undertaken related to remote Indigenous communities.

Throughout May 2016, CCMC committee members and staff met with representatives from several consumer advocacy organisations in Melbourne and Sydney and attended the Financial Counselling Australia Conference in Adelaide.

At its most recent meeting on 2 June 2016, the Committee met with:

  • its equivalent compliance monitoring body in the customer owned banking sector – the Customer Owned Banking Code Compliance Committee – to discuss common compliance issues, and
  • ASIC to discuss its future projects and Regulatory Guide 183 – ‘approval of financial services sector codes of conduct’ in light of the upcoming reviews of the Code and the CCMC.