Banking Code Compliance Monitoring Committee Bulletin – April 2018

Welcome to Issue 26 of The Bulletin. In this edition:


The revised Banking Code of Practice and the Banking Code Compliance Committee

On 19 December 2017, the Australian Banking Association (ABA) submitted the revised Banking Code of Practice (the revised Banking Code) and the Banking Code Compliance Committee (BCCC) Charter to the Australian Securities and Investments Commission (ASIC) for approval under section 1101A of the Corporations Act 2001.

The CCMC has had extensive interactions with both the ABA and ASIC in recent months to share its views on both the revised Banking Code and its associated governance and compliance monitoring arrangements.

The CCMC anticipates that the revised Banking Code will be published in the coming months and that this will initiate the CCMC’s transition to the BCCC.


The CCMC’s monitoring program for 2018

The following Code monitoring activities are either in progress or under development:


Own Motion Inquiry into breach reporting

The CCMC stated in its 2016–17 Annual report that it has recognised the need to better understand the underlying issues and customer impact of breaches reported to the CCMC. The CCMC has commenced an Own Motion Inquiry to better understand the issues, customer impact and financial impact of the breach data reported for the 2016–17 reporting period.

Through this Inquiry the CCMC will:

  • benchmark and report to industry and the wider community on banks’ monitoring practices, and compliance with the Code
  • establish the areas of highest priority for its future monitoring work, and
  • develop its strategy for future data collection.

The CCMC plans to publish its findings by June 2018.


A transitional inquiry into the financial difficulty obligations under the 2013 Code and revised Banking Code

The CCMC anticipates that the revised Banking Code will expand the financial difficulty provisions of the 2013 Code and introduce a strong focus on vulnerable customers.

Under item 1.7 of the CCMC’s 2017-18 Workplan, the CCMC is scheduled to undertake a follow-up review of banks’ compliance with Code clause 28 (financial difficulty). The CCMC is currently scoping an inquiry which will monitor compliance with the 2013 Code and also gather information to provide guidance that assists banks with their transition to the revised Banking Code.

Through this Transitional Inquiry, the CCMC will aim to:

  • Assess, benchmark, and report on banks’ current level of compliance with the Code.
  • Share examples of good practice with the industry and community.
  • Assess the adequacy of banks’ financial difficulty frameworks and provide guidance about alterations required to meet the revised financial difficulty Code obligations.
  • Develop guidance for the industry on best practice principles when working with customers to overcome financial difficulty.

The CCMC plans to publish its findings by September 2018.


The 2017–18 Annual Compliance Statement (ACS) program

The CCMC is currently developing its 2017–18 ACS which enables the CCMC to:

  • Benchmark banks’ compliance with the Code during that period.
  • Report on current and emerging issues in Code compliance to the industry and wider community.
  • Establish the areas of highest priority for its future monitoring work.

In line with the CCMC’s approach to data collection in its breach reporting Inquiry, the CCMC will seek detailed breach reporting data from banks, along with information about:

  • the implementation of recommendations from previous CCMC reports
  • complaint and dispute resolution, and
  • requests for financial difficulty assistance.

The outcome of the 2017–18 ACS program will be reported in the CCMC’s 2017–18 Annual Report in November 2018.


Improving banks’ compliance with direct debit cancellation obligations

In October 2017, the CCMC reported that:

  • customers continue to be frustrated by bank staff providing incorrect information about cancellation of direct debits, and
  • will continue this monitoring until it is satisfied that compliance has permanently improved to a sufficient level.

The CCMC is conducting periodic, ad-hoc and small-scale mystery shopping exercises to test banks’ compliance and will include several questions in the 2017–18 ACS asking banks to report on their efforts to enhance compliance and the effect of those efforts.

Again, the CCMC will report on the outcomes of these activities in its 2017–18 Annual Report.


More broadly, the CCMC is mindful of the many external developments that are likely to have an impact on its operations and those of Code subscribing banks throughout 2018, including the Royal Commission into misconduct in the banking, superannuation and financial services industry.

The CCMC will continue to monitor these developments for any impact on its work.


Stakeholder engagement

The CCMC has met regularly with the ABA and ASIC to discuss its work program and ongoing developments regarding the revised Banking Code and the associated governance and compliance framework.

In December 2017, Rural Bank Limited became the 14th bank to adopt the 2013 version of the Code. CCMC staff have met with Rural Bank to discuss the CCMC’s Code monitoring program.

Among other things, CCMC staff and representatives also recently:

  • Attended the ASIC Annual Forum in Sydney.
  • Met with Gerard Brody (Chair, Consumers’ Federation of Australia and CEO, Consumer Action Law Centre)
  • Attended the Financial Counsellors’ Association of Queensland 2018 Annual State Conference in Noosa, Qld.
  • Presented at the South Australian Financial Counsellors Association Professional Development Day in Adelaide, SA.
  • Presented at the ‘Together making change’ 5th National Elder Abuse conference in Sydney.
  • Met with staff from the Consumer Action Law Centre in Melbourne to discuss current issues for customers in financial difficulty.
  • Met with a bank that plans to adopt the revised Banking Code.

In April 2018, the CCMC will meet with all subscribing banks and the ABA to discuss the CCMC’s Code monitoring activities and workshop the 2017–18 ACS.


CCMC Investigations – Key statistics

Between 1 December 2017 and 28 February 2018 the CCMC:

  • Received 8 new matters, which raised allegations of non-compliance with the Code related to:
    • financial difficulty (3 allegations)
    • provision of credit (2)
    • key commitments (1)
    • direct debits (1)
    • debt collection (1)
    • terms and conditions (1)
    • internal dispute resolution (1), and
    • information relating to foreign exchange services (1).


  • Finalised 19 matters, including:
    • Two where banks agreed to self-report breaches of the Code.
    • One where the CCMC found that there had not been a breach of the Code.
    • Five where the CCMC incorporated allegations into its wider monitoring of the direct debit obligations under the Code.
    • Two that were outside of the CCMC’s jurisdiction because they did not relate to a Code subscriber.
    • Four that were outside of the CCMC’s jurisdiction because they did not relate to products or services to which the Code applies.
    • Two where the Code breach allegations were withdrawn.
    • Three where there was no further contact from the person making the allegation.