Topics covered in this issue of the Bulletin:

New beginnings and fresh focus

It’s been a season of change, with 1 July marking both the introduction of the 2019 Banking Code of Practice (the Code) and a new Charter, and name, for the independent Committee that monitors compliance with the Code. The changes bring the challenges of transition and, with expanded powers under the new Charter, a timely opportunity for the Banking Code Compliance Committee (BCCC), to reset its goals and areas of focus.

The Charter grants the BCCC (formerly the Banking Code Compliance Monitoring Committee) broader jurisdiction and greater power to consider breaches of the Code. The Charter can be found on the BCCC’s new website, along with newly developed operating procedures.


BCCC sets priorities and announces its first target areas

Our purpose is to monitor and drive best practice Code compliance. A vital element of this has been deciding what our priorities will be under the new Charter and identifying the first areas we want to focus on. Our strategic and business plans reflect these decisions and both can be viewed on the BCCC website.

The priorities listed in the Strategic Plan are to:

  • lead the transition to the revised Code
  • monitor and investigate banks’ compliance with the Code
  • improve practices and outcomes for customers, and
  • build strong relationships with customers, small business and agribusiness advocacy groups.

The first areas we have chosen to spotlight in our Business Plan reflect a range of timely issues and customer needs: transition to the 2019 Code; customers experiencing vulnerability; small business and farming; and, risk-based monitoring and investigations. From a Code perspective, this will involve looking at the areas of data collection, financial difficulty, guarantees and direct debits.

We look forward to investigating these areas of concern, sharing the results of our findings and offering guidance to banks on how to improve the standards of practice. We welcome input from relevant stakeholders in all of these areas.


Small business and farming advisory panel

We are currently considering applications for an expert panel that will provide the Committee with advice and guidance on small business and agribusiness banking matters.

Please see the Small Business and Agribusiness Advisory Panel Terms of Reference and a message from the Committee’s Chair for further information about the role of the panel.


BCCC Guidance Note: Breach Identification and Reporting

We have published the BCCC’s first guidance note which sets out the Committee’s expectations for how banks should identify, record and report breaches of the 2019 Code.

Comprehensive breach reporting is essential for banks to demonstrate accountability for their compliance with the Code. We expect banks to have methodical processes in place to ensure that breaches are identified and corrected, and to be transparent in their reporting to the BCCC.



Case Study: Insurance issue flags need for regular monitoring

Last year, a bank self-reported to the Committee that it had failed to comply with clause 12.6 of the 2013 version of the Code, missing more than three years of annual notifications. It spotted the breach while transitioning to the 2019 Code.

The clause required subscribing banks to every year remind customers who have a credit facility secured over a primary place of residence or residential investment property of their obligations to insure the property under the terms and conditions of their relevant mortgage. The reminder must also include: a general statement to make inquiries with their insurer about cover; and, a reference to ASIC’s MoneySmart website ( for information on property insurance.

In the 2019 Code, similar provisions are at Part 3, Chapter 11, Clause 30.

The bank found that this wording on customer statements was included as a “one off” requirement rather than on an annual basis. It conceded that it had no monitoring, audit or other arrangements to ensure ongoing compliance with clause 12.6.

The bank has now taken steps to ensure the notification is hard coded into its systems and that the relevant messaging appears on statements every year. To ensure this is not missed again, the bank will review and test compliance with this aspect of the Code annually.

The bank also committed to writing to affected customers with a current account advising of the breach, its obligations under the Code and contact details for themselves and the Australian Financial Complaints Authority.

As we transition to the new Code, we urge banks to remember that they should not only establish processes to ensure compliance, but regularly review and monitor these safeguards.


Direct debit compliance update

The BCCC’s ongoing monitoring of compliance with direct debit Code obligations revealed some concerning practices that banks must address – as well as many positive actions that could help safeguard these important customer protections. The BCCC has published an article highlighting some ongoing concerns and sharing some good practice to assist banks to improve compliance with the Code.


Transition inquiry

The BCCC is presently conducting an inquiry into banks’ transition to the 2019 Code to see whether banks have taken the necessary steps to ensure compliance.

Our actions will include: assessing, benchmarking and reporting on banks’ transition projects; checking that banks’ compliance frameworks will support ongoing compliance with the new Code; ensuring that gaps in compliance are corrected; and, identifying and sharing examples of good practice.

Of particular interest to the BCCC will be the banks’ commitment to embedding the spirit of the Code into its culture, including its Guiding Principles and the concept of fairness. As is always the case with institution-wide culture, the level of oversight from senior executives and members of the Board will be critical.

We also seek to identify the compliance gaps between practices that occurred under the old Code and obligations set out in the 2019 Code and assess banks’ implementation of policies, processes, procedures and system changes to ensure compliance with the new Code.

Outcomes of the transition inquiry are expected to be reported later this year.


Guarantees inquiry

The BCCC is also undertaking a two-part inquiry into guarantee obligations: an initial data collection to review policy and process and understand customer experience, followed by an in-depth audit of guarantees. The BCCC invites contributions from anyone with relevant information. They should contact our Compliance Manager, Liam Cronin at: [email protected].


Having a say in industry consultations

Since our last Bulletin, the committee monitoring Code compliance (previously the CCMC) made three contributions to significant industry consultations.

The first was a submission to the Australian Securities and Investments Commission (ASIC) review of responsible lending. Both the 2013 and 2019 versions of the Code carry obligations about the provision of credit by banks and the 2019 Code requirement that banks take a responsible approach to lending is reinforced by one of the Code’s Guiding Principles.

The second submission was to the Australian Banking Association’s consultation regarding a new guideline on supporting customers experiencing vulnerability. The submission shared the Committee’s expectation that banks’ commitment to customers in vulnerable circumstances go beyond the express protections and must become part of the foundations of their culture and conduct.

The third submission was to ASIC’s proposals to update its policy on internal dispute resolution (IDR) requirements. The Committee shared its experience and findings from many years of collecting IDR data and investigating breaches of the Code’s IDR obligations.


We invite and rely on community engagement

To assist us to monitor compliance with the 2019 Code, we invite input from relevant stakeholders, whether it be banking management and staff, customers, consumer advocates or the wider community.

As well as examining complaints and accepting contributions to inquiries, the BCCC is keen to hear about emerging industry trends, feedback on Committee recommendations and other relevant matters.

Codes of Practice are an important part of the consumer protection framework that complement law and regulations and encourage industry practice that exceeds minimum standards. Broad engagement with the Code also builds trust between banks and the wider community.

Interested parties should contact our Compliance Manager, Liam Cronin at: [email protected].