Sydney, 16 December, 2008: The Australian Bankers’ Association (ABA) welcomes the release of the Final Report on the Review of the Code of Banking Practice from the independent reviewer Jan McClelland.

The Code of Banking Practice is the banking industry's customer charter on best banking practice standards. The Code sets out the banking industry's key commitments and obligations to customers on standards of practice, disclosure and principles of conduct for their banking services.
 
Over the past 12 months, Ms McClelland has been consulting widely with a broad range of interested parties including consumer advocacy groups, government, regulators, banks, individuals and others.
 
The main purpose of the current review is to determine how the Code of Banking Practice has been working since the last review, which was completed in May 2004, and to identify and make recommendations as to how it might be changed.

The Reviewer’s final report has been delivered and is published on the Review of the Code of Banking Practice website – www.reviewbankcode2.com.au

David Bell, Chief Executive of the ABA, said: “Ms McClelland has made some challenging recommendations on how the Code might be updated to take account of changes in the banking services market since the last review. The general thrust of Ms McClelland’s recommendations indicates she has taken a balanced approach to this review. The ABA will now consult its member banks on each of the recommendations in the report.”
 
“The Code, which was established by Australian banks, is an integral part of the regulatory framework. It is important that the Code continues to adapt to changes in the community and the way banks operate.”

“In these uncertain times, the Code’s high benchmarks, which banks must meet, provide confidence and certainty for customers. The Code is a strong foundation for the relationship between banks and their customers. It is significant to note that not all financial services providers meet the same high standards.”

“There are legislative and regulatory developments that have been running in parallel with the Code’s review, including the Commonwealth’s decision to assume control of consumer credit regulation from the States and Territories and wide ranging reform to Australia’s privacy laws. The ABA is mindful of the need to consider any changes to the Code in the context of these developments.”

“For example, the recommendation that the Code should contain a responsible lending provision needs to be considered by ABA members in the first instance and needs to take account of the Federal Government’s plans in consumer credit regulation,” said Mr Bell.

The ABA anticipates a positive response from its member banks to most if not all of Ms McClelland’s recommendations. The ABA will soon publish a response to the recommendations, including an explanation of why a recommendation is accepted, partially accepted or not accepted.
 
Notes for editors:

• The Code of Banking Practice can be accessed from the Australian Bankers’ Association website
• The Code applies to personal and small business bank customers. The Code provides for it to be reviewed every three years. When your bank adopts the Code, it is a binding agreement between you and your bank.
• The Code is used extensively by the Financial Ombudsman Service in making assessments in disputes between customers and banks.
• Independent Reviewer Jan McClelland is an experienced reviewer who has previously headed Government Reviews into a wide range of issues and sectors, including reviews into the NSW Consumer, Trader and Tenancy Tribunal, NSW Government Recruitment, Mine Safety, Police Education, Road Safety Education, Business Planning and Corporate Governance, and Shared Services, Asset Management and Procurement.
• Ms McClelland was the former NSW Director-General Education and Training and Managing Director of the NSW TAFE Commission and has held senior public service positions with the NSW Departments of Education and Training, Health and Public Service Board. She is also Chair and Director of government, private sector and not-for-profit organisations. In 2005, Ms McClelland was Chair of the Australian Consumers Association now known as Choice.