Banks' can continue to work in concert for Covid relief programs
The competition watchdog will allow the nation's banks and the bank lobby group to keep working together on a variety of relief measures to assist customers during the pandemic.
The Australian Competition and Consumer Commission said Covid relief packages allow for “temporary and limited" coordination between the Australian Banking Association and the lenders.
Without this authorisation, banks would be forced to offer separate financial relief packages without standardisation or consistency, according to the ACCC.
The regulator said relief includes the deferral of loan repayments and the waiving of certain banking fees for small businesses hurt by the pandemic.
The ABA was forced to seek ACCC approval on behalf of its members because the relief packages involve coordination by competing banks, actions that would otherwise raise concerns under Australian competition laws.
However, banks are not permitted to coordinate on any element of prices for any service or product.
“In the context of Covid- related lockdowns and restrictions, the ACCC recognises that large numbers of businesses and individuals are continuing to experience significant financial hardship,” said ACCC chair Rod Sims.
“We consider that the ABA’s coordinated packages are likely to assist banks with providing relief to businesses and other customers impacted by coronavirus restrictions, maintain access to banking services and support financial recovery.”
Better and more tailored products
Sims said as well as offering customers the packages covered by the interim approval, banks can also individually offer more favourable and tailored solutions to their customers experiencing financial hardship during these times.
The permit applies to all ABA member banks who agree to participate, which may vary according to the specific package.
The approval is conditional on the ABA providing details of any programs and arrangements to the antitrust regulators before implementation.
ABA chief executive Anna Bligh said that more than 20,000 Australians had applied for assistance from their banks across both home loans and business finance since 8 July.
“Lockdowns continue to bite across several states, and banks are again stepping up to help,” she said.
“Support is available to all small businesses and home loan customers significantly impacted by current lockdowns or recovering from recent lockdowns, irrespective of geography or industry.”
The majority of applications were in New South Wales, which has been hardest hit by lockdowns, but there are measures in place in Southeast Queensland and Victoria.