CCMC Special Report: Access to Banking Services by Indigenous Customers

The Banking Code Compliance Monitoring Committee (CCMC) is pleased to release its Special Report into access to banking services by Indigenous customers.

Clause 8 of the Code of Banking Practice (the Code) sets standards of good practice for subscribing banks regarding customers in remote Indigenous communities.

The CCMC has brought together compliance and other data to share some of the work major Australian banks are doing, both individually and in partnership with the industry and other stakeholders, to increase Indigenous financial inclusion, financial literacy and cultural awareness.

The CCMC’s aim is to share these examples of good practice with all Code-subscribing banks so that the industry as a whole can continue to improve their service to Indigenous customers.

CCMC Special Report: Access to Banking Services by Indigenous Customers PDF (545KB, 22 pages)
Tagged with: , , , , , , , , ,
Posted in Inquiry Reports, News & Publications

CCMC Workplan 2017-20

The Banking Code Compliance Monitoring Committee (CCMC) is an independent compliance monitoring body established under clause 36 of the 2013 Code of Banking Practice (the Code). Its purpose is to assure the community that the Code-subscribing banks (banks) honour their Code obligations to their customers.

An independent review of both the CCMC and the Code were conducted in 2016, with the final reports published in February 2017. It is anticipated that a new Code and CCMC Mandate will be developed in response to the recommendations and released later in the year.

The CCMC Review made six recommendations to improve the effectiveness and visibility of the Committee’s work. The CCMC considers the independent review of its operations to represent a guide to robust monitoring of the Code. With these recommendations in mind the CCMC has developed its annual Workplan to deliver three key objectives for the 2017-18 financial year, these are:

 

Through its key objectives the CCMC remains committed to delivering a comprehensive and meaningful monitoring program. In order to deliver on these objectives the CCMC has specifically designed its Workplan to prioritise the following areas:

  • Update the process for the investigation of Code breach allegations to reflect a risk based approach.
  • Develop enhanced data collection processes and systems to inform risk based assessment.
  • Conduct a major Own Motion Inquiry into Internal Dispute Resolution (clause 37) and follow-up Inquires into Direct Debits (clause 21) and Financial Difficulty (clause 28).
  • Increase the depth and frequency of publications and guidance notes to report on industry trends and encourage continuous improvement.
  • Engage with all stakeholders to assist with the transition to the new Code as the need arises.

In developing its Workplan, the CCMC has assessed the current risks to Code compliance and directed its resources to address the highest areas of concern. It will continue to assess these risks and adjust the activities to be undertaken throughout the year.

The full CCMC Workplan for 2017-20 can be downloaded using the link below:

CCMC Workplan 2017-20 (PDF, 299kb)

Tagged with: , , , ,
Posted in News & Publications

Banking Code Compliance Monitoring Committee Bulletin July 2017

Welcome to Issue 23 of The Bulletin. In this edition:

 

The CCMC Workplan 2017–20

The CCMC’s purpose is to assure the community that banks honour their Code obligations to their customers. To achieve this, the CCMC has published its Workplan for 2017–20. It has been specifically designed to assist the CCMC undertake its key functions in an efficient and effective manner throughout what is anticipated to be a year of significant change. It is a three-year strategic Workplan, the key objectives of which are:

  • Monitor banks’ practices
  • Identify and report on industry wide problems, and
  • Encourage continuous improvement.

The key features of the Workplan for 2017–18 are intended to reflect the CCMC’s response to the independent review of its operations and include:

  • Update the process for the investigation of Code breach allegations to reflect a risk based approach.
  • Develop enhanced data collection processes and systems to inform risk based assessment.
  • Conduct a major Own Motion Inquiry into Internal Dispute Resolution (clause 37) and a follow-up Inquiry into Financial Difficulty (clause 28).
  • Increase the depth and frequency of publications and guidance notes to report on industry trends and encourage continuous improvement.
  • Engage with all stakeholders to assist with the transition to the new Code as the need arises.

Independent reviews of both the CCMC and the Code were conducted in 2016, with the final reports published in February 2017. It is anticipated that a new Code and CCMC Mandate will be developed in response to the recommendations and released later in the year. The CCMC is focussed on delivering a comprehensive and meaningful monitoring program and is taking steps to ensure that it is positioned to review and amend its governance arrangements in anticipation of the new Banking Code and Mandate.

The CCMC is required under clause 1.6 of its Mandate to publish an annual business plan, of which the Workplan forms part. In accordance with this clause, a copy of the Workplan has been provided to the Australian Bankers’ Association (ABA) and to the Chief Ombudsman of the Financial Ombudsman Service (FOS).

Access to banking services by Indigenous customers

The CCMC is currently finalising a special report which shares banks’ approaches to dealing with Indigenous customers and communities. Under clause 8 of the Code, subscribing banks are required to render special assistance to members of remote Indigenous communities.

The report will highlight broad banking issues faced by these communities and share examples of good practice in services provided by Code-subscribing banks.

We expect to publish the report by the end of July 2017.

Follow-up Research – Direct Debits

The CCMC has commenced follow-up research into the direct debit obligations under clause 21 of the Code.

The CCMC conducted an Own Motion Inquiry into the obligations in 2009 and a follow-up in 2012. On both occasions the CCMC stated that the findings fell short of expectations. The CCMC is aware that customers continue to experience issues when requesting a cancellation of a direct debit, including from submissions made to the Code Review in 2016.

The CCMC will be contacting banks shortly to explore any issues in this area and expects to publish a report of its findings in September 2017.

CCMC Investigations – Key statistics

Between 1 March 2017 and 31 May 2017 the CCMC:

  • Received 13 new matters, which raised allegations of non-compliance with the Code related to:
      • direct debits
      • key commitments
      • internal dispute resolution
      • debt collection, and
      • chargebacks.
  • Finalised ten matters, including:
      • Four by Delegated Decision:
        • two where the CCMC found that there had not been a breach of the Code
        • one where the CCMC considered it was appropriate to exercise its discretion to not investigate the matter, and
        • one outside of the CCMC’s jurisdiction due to the ‘12 month rule’.
      • One outside of the CCMC’s jurisdiction because the allegation related to a banking service outside of Australia.
      • Three where there was no further contact from the person making the allegation.
      • Two where the consumer withdrew their Code breach allegation.

2016–17 Annual Compliance Statement program

The CCMC has provided banks with the 2016–17 Annual Compliance Statement (ACS) for completion. Responding to findings from the CCMC review, the CCMC is asking banks to provide a more detailed breakdown of Code compliance data to enable it to more fully explore trends and emerging issues.

The CCMC consulted with banks on the development of the ACS between April and June 2017, and will continue this engagement in the coming months to understand banks challenges when completing the ACS.

The outcomes of the ACS program, including any emerging risks and identified good industry practice, will be discussed with key stakeholders directly and published in the CCMC’s Annual Report for 2016–17.

Stakeholder engagement

Engagement with stakeholders is important for the CCMC to help inform its compliance monitoring program and raise awareness of its activities. Recently, CCMC Committee members and staff have:

  • Met regularly with the ABA to discuss matters related to the reviews of the Code and the CCMC and the development of a revised Code and CCMC Mandate.
  • Attended the 2017 Financial Counselling Australia conference on the Gold Coast.
  • Met with ASIC for the quarterly liaison meeting.

The CCMC’s new Compliance Manager

The CCMC has welcomed a new Compliance Manager, Donna Stevens, who joined the team on 13 June 2017. Donna has a background in the banking industry and in law, she holds a Bachelor of Law and Legal Practice from Flinders University.

Donna joins the CCMC after 7 years with the Westpac Group where she specialised in litigation and internal and external dispute resolution. Her experience spans a number of jurisdictions and areas of the retail banking sector, some of which include: disputes arising offshore, banking fraud, consulting on matters of general banking compliance and strategy, and collections.

She is responsible for delivering the CCMC’s Code monitoring program as set out in its annual Workplan.

 

 

Posted in Bulletins, News & Publications

The CCMC Bulletin 22 – March 2017

Welcome to Issue 22 of The Bulletin. In this edition:

 

Reviews of the CCMC and the Code of Banking Practice

Mr Phil Khoury, of Cameron Ralph Khoury, published the reports of the reviews of the CCMC and the Code on 20 February 2017.

The Australian Bankers’ Association (ABA) released its response to the Code review on 28 March 2017. The banking industry has accepted 61 of the 99 recommendations in full. There are 29 recommendations that it supports in principle or in part, and nine where it either needs more time to consider, or are not in a position to adopt.

The Code review made 20 recommendations directly related to the CCMC and its operations. The industry supported 16 in full and 4 in principle or in part.

In the ABA’s Media Release, its Executive Director – Retail Policy, Ms Diane Tate said:

“While the Code has legal effect through subscribing banks’ terms and conditions, we have heard we need to do more to give customers confidence in the Code. That’s why the ABA will work with the Australian Securities and Investments Commission on approving the Code, and on giving greater powers to the Code Compliance Monitoring Committee.”

The ABA response states that:

“The industry will work with the [CCMC] on strengthening the governance of the Code. The CCMC mandate will be redrafted to make it clearer, ensuring there is greater awareness of, and understanding of, the CCMC and its role. The CCMC will have greater powers to monitor compliance and investigate breaches. The role of the CCMC will also need to be examined as part of working with the Australian Securities and Investments Commission (ASIC) on approving the new Code.”

The CCMC is currently developing its Work Plan and establishing budget requirements for 2017–18 and beyond. This Work Plan will demonstrate:

  • how the CCMC plans to implement the recommendations made in the CCMC review, and
  • progress towards a monitoring framework envisaged by the Code review, and which is now largely supported by the ABA and banking industry.The CCMC’s Work Plan will be published by 1 July 2017.

The Code review is part of the ABA measures to protect consumer interests, increase transparency and accountability and build trust and confidence in banks. The CCMC was required to arrange a review of its activities, coinciding with the review of the Code, to meet its Mandate obligations.

 

The CCMC’s Provision of credit Own Motion Inquiry

The CCMC published its Provision of credit Own Motion Inquiry Report in January 2017.

The Inquiry focused on unsecured credit and the CCMC found that banks generally have robust, and often complex, processes in place to assess applications for unsecured credit in compliance with the Code.

However, the CCMC did identify potential issues, including matters related to the collection and verification of current customer information.

Information provided to the Inquiry suggests that the majority of applications for unsecured credit are processed using automated systems. The CCMC has stated that up-to-date information regarding a customer’s financial position should be incorporated into the credit assessment, whether processed manually or by an automated system. The CCMC considers that having a full and current picture of a customer’s financial circumstances is fundamental to complying with the Code obligations.

The CCMC has made nine recommendations in its Report, which:

  • support Code compliance, and
  • can assist banks to continuously work towards improving standards of practice and service in the banking industry as anticipated by clause 3.1(a) of the Code.

Annual Forum

The CCMC held its Annual Forum for banks on 2 and 3 March 2017 at Suncorp Bank’s offices in Brisbane.

The forum provides an opportunity for discussion between the banks and the CCMC on current and future Code compliance monitoring issues.

At this year’s forum:

  • Phil Khoury presented on the reviews of the CCMC and Code.
  • Diane Tate, ABA Executive Director – Retail Policy, provided attendees with updates on current regulatory inquiries and the ABA’s current program of initiatives (which includes the Code review).
  • The CCMC held:
    • a workshop on banks’ approach to Code breach reporting to try to achieve consistency and common understanding across the industry, and
    • a session discussing issues around accessibility to banking, with the assistance of Paul Holmes from Queensland Legal Aid and Sharona Torrens from the Commonwealth Bank’s Indigenous Affairs team.

Remote Indigenous communities

The CCMC is currently developing a report on banks’ approaches to dealing with remote Indigenous communities. The report will highlight broad banking issues faced by these communities and share good practice in services provided by Code-subscribing banks.

We expect to publish the report by June 2017.

 

CCMC Investigations – key statistics

Between 1 December 2016 and 28 February 2017 the CCMC:

  • Received nine new matters, which raised allegations of non-compliance with the Code related to:
      • financial difficulty
      • key commitments
      • internal dispute resolution, and
      • guarantees.

 

  • Finalised eight matters, including:
      • one by Delegated Decision where the CCMC adopted a decision made by another forum that there had not been a breach of the Code
      • one regarding an organisation that is not a Code-subscriber
      • one where there was no further contact from the person making the allegation, and
      • five where the consumer withdrew their Code breach allegation.

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

 

2016–17 Annual Compliance Statement program

The CCMC is currently developing the 2016–17 Annual Compliance Statement (ACS) program. In light of the findings from the Code and CCMC reviews, this year the CCMC will be asking banks to provide a more detailed breakdown of Code compliance data and exploring the trends and emerging issues behind this data to fully understand:

  • the level of 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 CCMC will consult with banks on the development of the ACS in April 2017. The outcomes, including any emerging risks and identified good industry practice, will be discussed with key stakeholders directly and published in the CCMC’s Annual Report for 2016–17.

 

Stakeholder engagement

Engagement with stakeholders is important for the CCMC to help inform its compliance monitoring program and raise awareness of its activities.

In addition to its Annual Forum, CCMC Committee members and staff have:

  • Met regularly with banks and the ABA to discuss Code compliance issues, remote Indigenous communities and the Code and CCMC reviews.
  • Consulted with Phil Khoury on matters related to the reviews of the CCMC and Code.
  • Attended the Financial Counsellors’ Association of Queensland conference in Port Douglas.
  • Presented at the Responsible Lending and Borrowing Summit in Sydney.
  • Attended the ASIC Annual Forum for 2017 and met with ASIC for its quarterly liaison meeting.

 

The CCMC’s Compliance Manager

The CCMC will be saying farewell to its Compliance Manager, Robert McGregor, on 7 April 2017. Robert has been with the CCMC since 2011 and we are grateful to Robert for his diligence in managing the Committee’s work and liaising with Code-subscribers, while also providing valuable guidance and support to all stakeholders.

We will announce his replacement in due course.

Tagged with: , , , , , ,
Posted in Bulletins, Code Reviews, News & Publications