The Council of Financial Regulators has published its advice to the Commonwealth Treasurer on potential policy responses to address de-banking as it specifically relates to financial technology firms, digital currency exchanges, and remittance providers.
The Council of Financial Regulators worked with AUSTRAC, the ACCC and the Department of Home Affairs to provide the advice.
De-banking occurs when a bank declines to offer a core banking service to or withdraws a core banking service from, a customer. Banking services in this context refers to transaction accounts and not the provision of more complex banking or credit products.
The CFR has proposed the following proposed package of policy measures to address some of the main frustrations experienced by the affected businesses:
1. Collect de-banking data – A data collection process would provide additional information into the extent and nature of the de-banking problem and inform any future policies;
2. Introduce transparency and fairness measures to address stakeholder concerns about banks’ processes in relation to the provision of core banking services;
3. Advise the major banks of the Government’s expectation that they provide guidance on their risk tolerance and requirements for the affected sectors;
4. Consider funding education on compliance processes of businesses in the affected sectors, particularly small enterprises.
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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.
