ABA announces temporary code changes
The Australian Banking Association (ABA) has announced two temporary changes, which will see changes to the Banking Code of Practice allowing more flexibility over customer communication timeless and obligations to lending to small businesses.
Due to the COVID-19 pandemic, these temporary changes had been approved by the Australian Securities and Investments Commission (ASIC):
- In certain circumstances banks may not always be able to meet the timelines for customer communication outlined in some provisions of the Banking Code of Practice; and
- A bank’s obligations when lending to small business customers, to engage in a fair, reasonable and ethical manner, and to exercise the care and skill of a diligent and prudent banker, will be informed by the circumstances and effects of COVID-19 generally.
The ABA said the changes acknowledged that during the pandemic and its aftermath, banks were dealing with high volumes of customers in distressed circumstances.
“Many customer solutions offered as part of the banks’ COVID-19 assistance are tailored, and require banks to ensure the right support to suit customer circumstances,” it said.
The changes would help continue the flow of credit to small and family businesses by recognising the assessment of business loan applications presented unique challenges in this environment.
Under these changes, the obligations remained in place, but non-compliance would not constitute a breach of the code if the banks made a good faith effort to comply.
All other parts of the code continued to apply as usual.
AUTHOR
Chris Dastoor
Recommended for you
With regional and rural suburbs exhibiting high spare capacity to invest, Money Management speaks to three regional advisers on the opportunities beyond the major cities and the importance of a strong network.
Platform consolidation is expected to accelerate among financial advisers this year, as software company Finura pinpoints which two platforms are set to be the winners, thanks to this trend.
The software provider has made several appointments in its APAC wealth propositions team, with a focus on driving growth across digital advice, Xplan and strategic partnerships.
The platform has announced it plans to close its Xplore managed discretionary account service in 2026 which holds $2 billion in funds under administration.
