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The Banking Code Compliance Committee has published its report on subscribing banks’ compliance with the Code for the period July to December 2019. Banks self-report their compliance with the Code every six months. The most common category of breaches, accounting for 53% of reported breaches overall involved a breach of Part 2 of the Code which includes obligations to ‘protect a customer’s privacy and confidentiality, to train staff to understand the Code and to engage…
The Customer Owned Banking Code Compliance Committee has issued a good practice note, recommending that phone recordings should be used wherever possible to avoid misunderstandings about complaints. While a recent investigation into a Code breach allegation about privacy found that the Customer Owned Banking Code of Practice had not been breached in relation to a customer survey, the independent committee that monitors the Code identified a number of areas that might be of interest…
The Senate Economics Legislation Committee has published its report on the National Consumer Credit Protection Amendment (Small Amount Credit Contract and Consumer Lease Reforms) Bill 2019 (No. 2). The majority report recommends that the Senate not pass the private members’ Bill. The bill replicates the Government’s exposure draft legislation that was released for consultation in October 2017. Background. The report notes that on four occasions between February 2018 and September 2019, bills that…
The Australian Prudential Regulation Authority (APRA) has issued comments on “better practice” for authorised deposit-taking institutions (ADIs) assessment and management of loans with repayment deferrals. ADIs are encouraged by APRA to consider the following areas of better practice identified through its review of plans submitted by ADI’s: Governance and oversight: regular operational reporting to senior management to enable timely escalation of issues that may require management attention and oversight of progress against the implementation of…
The Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers) (Mortgage Brokers) Regulations 2020 have been registered. These regulations clarify the conflicted remuneration restrictions for mortgage brokers in the new Part 3-5A of the National Consumer Credit Protection Act 2009 which was inserted by the Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2019 Measures) Act 2020. The changes will commence on 1 January 2021. Background. The Regulations prescribe the circumstances under which a benefit…
The Government has extended temporary insolvency relief until 31 December 2020 and the Treasurer has announced the Government’s intention to introduce a new insolvency process under which incorporated businesses with liabilities of less than $1 million will be able to keep trading without an administrator while they develop a debt restructuring plan which will be voted on by creditors. The intention is for this new insolvency regime to start from 1 January 2021, following on…
The Crimes Legislation Amendment (Economic Disruption) Bill 2020 has been introduced into the House of Representatives and referred to the Senate Legal and Constitutional Affairs Legislation Committee for reporting by 10 November 2020. The Bill amends the Commonwealth Crimes Act and the Proceeds of Crime Act to “update Commonwealth money laundering offences to address the behaviour of modern money laundering networks and remove unnecessary obstacles to securing convictions and appropriate sentencing outcomes.” The Bill also…
AUSTRAC has issued an infringement notice to State Street Bank and Trust Company (State Street) for $1,247,400 for failing to report international funds transfers. Under section 45(2) of the AML/CTF Act, if a person is the sender or recipient of an international funds transfer instruction into or out of Australia, that person must, within 10 business days after the day on which the instruction was sent or received, give the AUSTRAC CEO a report about…
The Australian Law Reform Commission has been asked by the Commonwealth Government to inquire into the potential simplification of laws that regulate financial services in Australia. The Inquiry is part of the Government’s response to the Financial Services Royal Commission. The ALRC will not recommend policy changes regarding the content of obligations on financial service providers. The Terms of Reference focus on the provisions of the Corporations Act 2001 (Cth) and the Corporations Regulations 2001…
The Australian Prudential Regulation Authority (APRA) has issued the final amendments to Prudential Standard APS 220 Credit Quality which gives effect to the temporary capital treatment for loans with repayment deferrals or restructures due to COVID-19. This applies to ADIs working with borrowers to return them to a sustainable repayment structure, following the end of a loan repayment deferral. However, in the event that there is objective evidence that a borrower is unlikely to be…