The consultation process aims to gather insights and opinions on several key issues to help ASIC determine whether to approve the proposed Code. Areas of focus include:
- Existence of Additional Obligations: Evaluating whether the proposed Code imposes obligations on subscribers that go beyond what the law requires. This exploration aims to address potential consumer harms.
- Effective Administrative Systems: Assessing the adequacy of the proposed Code's administrative systems for monitoring compliance and its enforceability.
- Inclusion of Code Review Recommendations: Determining whether any Code review recommendations that have not been supported by the ABA should be incorporated into the proposed Code.
- Alignment with Accepted Recommendations: Examining the extent to which the recommendations accepted by the ABA are appropriately reflected in both the proposed Code and proposed Charter.
- Balance between Simplicity and Consumer Protection: Assessing whether the proposed Code strikes the correct balance between simplifying the Code, reducing regulatory duplication, and promoting consumer awareness of their banking relationship safeguards.
- Role of Industry Guidelines: Exploring the role of industry guidelines within the proposed Code.
Overview of the Proposed Changes
The ABA's proposed amendments to the Code encompass various aspects, aiming to enhance the banking experience for consumers. The key changes include:
- Extension of Obligations: Expanding the duty to exercise the care and skill of a diligent and prudent banker to loans unregulated by the National Credit Code.
- Guarantor Meeting: Introducing provisions mandating that reasonable steps be taken to ensure a meeting with a guarantor occurs before they sign their guarantee.
- Updated Definitions: Modifying the definitions of 'financial difficulty' and 'vulnerability' to better capture customers who anticipate future repayment challenges or those who may be vulnerable at any given time.
- Enhanced Customer Support: Incorporating new language and committing to referring customers to support services, such as interpreter and translation services, Auslan, National Relay Services, and accessible documentation, where appropriate and feasible.
- Expanded Small Business Coverage: Expanding the threshold for small businesses to access Code protections, increasing the upper limit of aggregate borrowings from $3 million to $5 million.
