Media Release: Banks have answered the call by customers in financial difficulty, but more will need to be done before 1 July 2019 to be ready for the ABA’s new and enhanced Code

Australian banks have financial difficulty programs that, for the most part, meet the requirements under the 2013 Code of Banking Practice, according to inquiry findings released today.

The inquiry, Assisting customers in financial difficulty (Part 1), was conducted by the independent Banking Code Compliance Monitoring Committee (CCMC) and included data from banks and the views of consumer advocates.

Sally Davis, Chief Executive of the CCMC, said: “With the number of Australians requesting financial difficulty assistance increasing significantly since 2011–12, it is more important than ever for banks to be ready and able to assist their customers”

“Overall banks are doing well and getting most of the basic requirements right. The new Code will require that banks take a broader, more forward-thinking approach to ensure that all customers get the assistance they need in times of difficulty.”

The inquiry made 14 recommendations for improvements in the way banks help customers overcome their financial difficulty. The CCMC has set expectations that banks should:

  • train all customer-facing bank staff, including lending staff, to be able to identify customers in financial difficulty
  • adopt flexible approaches to assistance, considering and providing long term assistance where it needed and appropriate, and
  • promote a culture of non-judgement and compassion when assisting customers.

Job-related issues, usually reduced income, reduced working hours or unemployment, were the main reason for people seeking financial difficulty assistance (42% of the total). Other reasons included accidents, illness (including mental illness), family separation and family violence. Banks granted about seven in ten requests for assistance a year.

In 2015, the CCMC conducted an initial own motion inquiry investigating banks’ compliance with financial difficulty obligations in the 2013 Code of Banking Practice. This follow-up inquiry was conducted partly to help banks transition to a new Code, developed by the Australian Banking Association, which comes into effect on 1 July 2019.

  • The Banking Code Compliance Monitoring Committee’s role is to monitor and drive best practice Code compliance. The Committee examines banks’ practices, identifies industry-wide problems and recommends improvements.

 

Report: Assisting customers in financial difficulty (Part 1) PDF (490KB, 36 pages)

Information about the Banking Code Compliance Monitoring Committee is available on its website, www.ccmc.org.au.

 

Further information:

Sally Davis

Chief Executive

Banking Code Compliance Monitoring Committee

sdavis@codecompliance.org.au

(03) 9613 7341