The ACCC has announced that it has granted interim authorisation to allow the Australian Banking Association (ABA) to take immediate steps to prepare to make certain changes to the Banking Code of Practice and for individual ABA members to implement the amendments immediately.
The changes are:
- amend Chapter 16 to specify that basic, low fee or no fee accounts will have no informal overdrafts, no dishonour fees, and no overdrawn fees consistent with points 3 and 4 of the Financial Services Royal Commission recommendation 1.8;
- amend Chapter 42 including to provide that farmers with a loan for the purposes of a farming operation will not be charged default interest during any period the land is in drought or subject to natural disaster, and define the circumstances in which this will apply consistent with the Financial Services Royal Commission recommendation 1.13; and
- amend Chapter 1 to define who is a farmer and what is a farming operation.
The ACCC considers that further consideration and consultation is required before it decides whether it is appropriate to grant interim authorisation to enable the ABA to agree to amend the Code to prescribe, and for individual ABA members to implement based on amendments to the Code, or take steps towards implementing, minimum criteria for eligibility for a basic banking account (BBA), and minimum features of a BBA.
Interim authorisation commences 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.
The proposed changes would come into force on 1 March 2020, pending ASIC approval of a second round of changes to the Banking Code separate to the ACCC’s review process.
