Quarterly report – January 2010

Implementation Process to Update the Code of Banking Practice

Following the publication of the Final Report into the review of the Code of Banking Practice by independent reviewer Ms Jan McClelland , in September 2009, the Australian Bankers’ Association (ABA) also published on this website its member banks’ responses  to the review recommendations.
 
Not all of the recommendations were fully accepted by members and the ABA's response document and media release  provides reasons why each of those recommendations was not accepted.  
 
The Commonwealth Government's new national consumer credit legislation, margin lending legislation and proposed unfair contract terms regulation have been significant developments since Ms McClelland's final recommendations were made.  These regulatory changes have had a major bearing on the ABA's approach to some of the recommendations.  
 
Under clause 5.4 of the Code, the ABA must publish on its website quarterly reports on the implementation of those recommendations which have been accepted until the implementation process is complete.
 
A key recommendation of the Code review is for the Code Compliance Monitoring Committee to be established as a separate independent unit within the Financial Ombudsman Service (FOS) reporting directly to and accountable to the FOS Board for the performance of its prescribed functions under the Code (see ABA response document Item 7 recommendations 9 - 18).
 
In November 2009, the ABA engaged Mr Phil Khoury of The Navigator Company Pty Ltd to assist with the process for implementing these recommendations.  Mr Khoury has consulted initially with a number of key interested parties including banks to discuss the implementation process. Mr Khoury is expected to provide his recommendations in the first quarter of this year.
 
The ABA's Community and Consumer Consultative Forum will be meeting in February 2010 to discuss the implementation process, further consultation arrangements and the approach to re-drafting the Code.
 
A further report on progress will be published at the end of March this year.

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