ACCC greenlights banks to amend banking code
The competition watchdog has granted the Australian Banking Association to take immediate steps to change the Banking Code of Practice, effectively removing the risk that banks could breach competition laws by agreeing to make and implement changes to the code.
In May, the ABA sought ACCC authorisation to implement revisions to the Banking Code in response to the Hayne Royal Commission.
ASIC has already rubber-stamped the association’s new Code.
The ACCC’s decision is separate to ASIC’s review process.
ACCC’s interim authorisation allows banks to agree not to charge default interest on loans secured by agricultural land in drought or natural disaster declared areas.
It also allows banks to agree not to charge dishonour fees or overdrawn fees or allow informal overdrafts on basic bank accounts.
The ABA also intends to amend the Code to define the minimum features of a basic bank account.
While welcoming the proposals overall, some consumer groups have raised some concerns and suggested improvements to the basic banking proposals.
The ACCC will consider any submissions and possible changes the ABA proposes in response to these issues before deciding whether to grant interim authorisation for the basic banking proposals.
“We’re allowing the banks to start making important changes following the Hayne Royal Commission, and for them to start taking steps to ensure they are prepared ahead of a new Banking Code coming into effect next year,” ACCC chair Rod Sims said on Thursday.
Interim authorisation will begin immediately and remains in place unless it is revoked by the ACCC or the when the ACCC completes its assessment of the application for authorisation.
The ACCC expects to issue a draft determination on the ABA’s authorisation application in September 2019.