Banking Code Compliance Monitoring Committee Bulletin – October 2017

Welcome to Issue 24 of The Bulletin. In this edition:

 

CCMC Special Report – Access to banking services by Indigenous customers

In July 2017, the CCMC published its Special Report into Access to Banking Services by Indigenous Customers.

The CCMC 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.

Follow-up Research – Direct Debits

The CCMC is currently finalising the report of its 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 has found that despite some improvement non-compliance is still unacceptably high and will work with banks to ensure that compliance improves through a revised, ongoing compliance monitoring program.

The CCMC expects to publish its final report by the end of October 2017.

 

2016–17 Annual Compliance Statement program

In its Annual Compliance Statement (ACS) for 2016–17, the CCMC asked banks to provide a more detailed breakdown of Code compliance data to ensure it is able to fully explain compliance trends and emerging issues to stakeholders.

The CCMC is currently analysing banks’ responses and will be providing feedback to banks individually during October 2017.

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

 

Investigations

Between 1 June 2017 and 31 August 2017 the CCMC:

  • Received six new matters, which raised allegations of non-compliance with the Code related to:
    • direct debits
    • financial difficulty
    • provision of credit
    • key commitments
    • statements of account, and
    • copies of documents.

  • Finalised six matters, including:
    • Two by Delegated Decision where banks agreed to self-report breaches of the direct debits and key commitments obligations under the Code.
    • Three where there was no further contact from the person making the allegation.
    • One where the consumer withdrew their Code breach allegation.

The CCMC is currently reviewing its approach to compliance investigations with a view to adopting a more risk based approach to Code breach allegations. Further information is available in the CCMC’s 2017–20 Workplan.

 

Stakeholder engagement

At each of its last three meetings, the CCMC has met with the Australian Bankers’ Association (ABA) to discuss developments regarding the Code review, in particular regarding the governance and compliance framework for the new Code.

CCMC staff have had additional meetings with the ABA and bank representatives to discuss matters relayed to the Code review and the CCMC’s ongoing monitoring work.

CCMC staff also recently met with:

  • the staff of a Customer Advocate of a major bank
  • the Consumer Action Law Centre in Melbourne, and
  • the Australian Securities and Investments Commission (ASIC) for a quarterly liaison meeting.

In September 2017 CCMC Chair, Chris Doogan, met with the Chairs of the equivalent compliance committees under the General Insurance Code of Practice, the Customer Owned Banking Code of Practice and the Insurance Brokers Code of Practice.

 

The CCMC’s Investigations Manager

The CCMC has welcomed a new Investigations Manager to the team, Rene van de Rijdt, who joined on 24 September 2017.

The CCMC said farewell to its previous Investigations Manager, Ralph Haller-Trost, on 8 August 2017. The Committee is grateful to Ralph for his service and wishes him well for the future.

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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)
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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)

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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.

 

 

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