ASIC approves updated version of the banking code

ASIC said on Friday it has approved an updated version of the Banking Code of Practice, which commenced on 1 July 2019.

The changes, made at the request of the ABA, include new provisions that put beyond doubt that a bank will not charge fees for services to deceased customers, where services are no longer being provided to that customer's estate; changes to the commitments around provision of valuations to small business customers; changes to reflect ASIC’s implementation of law reforms to credit card responsible lending; and minor technical corrections.

Since ASIC approved the code in August 2018, the ABA applied to ASIC for approval of a number of changes to the code. The watchdog is assessing those changes in two stages – it approved the first stage on 25 June 2019, and is due to decide on the second stage of changes later this year. 

The second batch of changes are designed to address recommendations of the royal commission and stakeholder feedback relating to various small business protections, and are planned to commence from 1 March 2020, ASIC revealed. 

The small business community has been pushing ABA to accept Hayne's recommendation to simplify the definition of small business to encompass businesses with a loan facility of up to $5 million and fewer than 100 full-time employees. 

The ABA, however, has been holding firm to its position, stating earlier that more consideration needs to be given to the issue by all key stakeholders.

ASIC appears to have listened to ABA, adding on Friday that before making further changes to the banking code it will engage with key stakeholders "to ensure that the revised code provides an appropriate level of commitment by banks to consumer and small business protections".