The Code of Practice was outlined at a Breakfast function attended by leading business owners.
The Australian Banking Association partnered with Western Sydney Business Chamber to brief the local business community and stakeholders on the new rule book for banks, the new Banking Code of Practice.
In operation since July 1 this year, the new ASIC approved Banking Code of Practice contains a big step up in protections for customers.
Under the new Banking Code of Practice, banks will no longer:
• Offer unsolicited credit card limit increases.
• Charge commissions on Lenders Mortgage Insurance.
• Sell insurance with credit cards and personal loans at the point of sale.
Under the code banks must:
• Offer low-fee or no-fee accounts to low income customers.
• Have a three day grace period on all guarantees to give guarantors enough time to make sure it’s the right option for them.
• Actively promote low-fee or no-fee accounts to low income customers.
• Provide reminders when introductory offers on credit cards end.
• Simpler and fairer loan contracts for small business using plain English that avoids legal jargon.
• Provide customers a list of direct debits and recurring payments to make it easier to switch banks.
The ABA has also briefed the business community on the new ‘financing your small business’ website designed as a ‘step by step’ guide on applying for finance.
CEO of the Australian Banking Association Anna Bligh addressed the business breakfast on the new Code and the “Financing your small business” website.
“Western Sydney makes an enormous contribution to the Australian economy, with 215,000 businesses supporting more than 2.5 million people,” Ms Bligh said.
“These events are important to listen to the concerns of both individuals and businesses on how we can make banking better.
“As part of our efforts to improve protections for customers, we have a new rule book for banks, the new Banking Code of Practice.
“Businesses across Western Sydney will experience tangible benefits from our new Code, including plain English contracts that are easy to understand and more notice and information if conditions change.
“In addition to this, banks have created a dedicated resource, financingyoursmallbusiness.com.au to help business owners navigate through the process of applying for finance from their bank,” she said.
Western Sydney Business Chamber Executive Director David Borger said financial institutions played an important part in supporting the growth of Western Sydney and that it was important that business and residents had confidence that they would be treated fairly.
“Banks and financial institutions are not everyday businesses, they play a vital role in the economy through the lending of money to aspiring business owners and families seeking to purchase their dream home,” Mr Borger said.
“A higher standard should always be applied to ensure that banks are living up to good customer service and community expectations,” he said.
