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Parliamentary Joint Committee on Corporations and Financial Services
Impairment of customer loans

DAVIS, Mrs Sally, Chief Executive Officer, Code Compliance Monitoring Committee

DOOGAN, Mr Christopher, Independent Chair, Code Compliance Monitoring Committee

McGREGOR, Mr Robert, Compliance Manager, Code Compliance Monitoring Committee

CHAIR: I welcome representatives of the Code Compliance Monitoring Committee. We have received your submission, which we have numbered as submission No.4. Would you like to make a short opening statement before we proceed to questions?

Mr Doogan : Good afternoon, Senators. We are pleased to be here. The CCMC is established under clause 36 of the 2013 Code of Banking Practice. It is comprised of me as the independent chair, Sharon Projekt representing the interests of the banking industry and Gordon Renouf representing the interests of consumers and small business. I provided copies of the code and last year's annual report to the inquiry secretary, under cover of my letter of 29 June. CCMC's mandate sets out its powers and functions. These include monitoring banks' compliance with code obligations, investigating any allegation that a bank has breached the code and monitoring any aspect of the code that is referred to the CCMC by the Australian Bankers Association.

The CCMC is an independent compliance monitoring body separate from the Financial Ombudsman Service. However, under the terms of our mandate any decision made by the FOS banking ombudsman to the effect that a code-subscribing bank has breached the code will be adopted by the CCMC. The code is a voluntary code of conduct which sets standards of good banking practice. It is owned and published by the ABA. It is important to note, however, that once a bank subscribes to the code it becomes mandatory for that bank to comply with the terms of the code. The code applies to retail banking customers of banking services provided by banks to individual and small business customers or potential customers as defined in the code. It also applies to any individual from whom a bank has obtained or proposes to obtain a bank guarantee. Thirteen banking groups currently subscribe to the code, meaning that it covers approximately 95 per cent of the Australian retail banking industry. The code forms an important part of the broader national consumer protection framework. It is a means by which code-subscribing banks complement statutory law and regulation in areas relating to service issues for consumers, standards of professional conduct, banking practices and, importantly, ethical behaviour.

As I indicated in my letter in June, there are no specific provisions in the code that relate to the revaluation of security or impairment of loans. We have no record of investigating any matters where this issue was raised as part of a complaint, nor do we have any record of any individual or small business bank customer approaching the CCMC with a complaint solely about revaluation of loan security or loan impairment. I do note, however, that the code does impose a number of obligations that are relevant to this inquiry. The obligations are: clause 27, to act as a prudent and diligent banker in assessing a customer's ability to repay a credit facility; clause 28, an obligation to try to assist customers with their agreement and cooperation to overcome financial difficulties with any credit facility held with the bank; and in clause 20, to provide at least 10 days notice to a small business customer of any change to terms and conditions where the change will be materially adverse to the customer and will only affect that customer.

During the 2014-15 financial year, the CCMC conducted an own motion inquiry into how well banks comply with the codes' financial difficulty obligations. This inquiry confirmed that banks had improved the way they deal with customers, including small businesses, when they were experiencing difficulty repaying a credit facility.

I would also mention at this time that in 2012-13 the CCMC conducted an inquiry into banks' compliance with the obligations of the code related to guarantees. This inquiry found that banks had in place adequate systems and procedures to meet these obligations. The inquiry did, however, make some recommendations to promote better informed decisions by prospective guarantors.

During the last financial year, 44 allegations were received alleging that banks had breached their obligations under the code. Of this number, we determined that 19 were actual breaches of the code and that only five of the breaches related to the provision of credit obligations.

We have reviewed the submissions made to this inquiry by individuals and small businesses. In many of the submissions, the issues raised appear to relate to the provision of credit and whether or not it should have been granted in the first place. We have been able to identify only two instances where a person making an allegation to the CCMC has also made a submission to this inquiry. In one case an investigation is currently ongoing, and in the other case it was identified that the bank had breached its obligations relating to the provision of copies of documents.

Further, I advise the committee that the CCMC will shortly be conducting an own motion inquiry into banks' compliance with the provision of credit obligations. The views and experiences of all stakeholder groups will be canvassed in the course of that inquiry.

Finally, I will mention that in the course of reading the submissions made to this inquiry, we found several factual errors relating to the code in a submission made by the Tasmanian Small Business Council, submission 61. To assist the committee, we have prepared a table identifying and correcting those errors. I should also mention that in submission 37, from Rural Business Tasmania, there is a statement that ASIC has begun an investigation into the code. The CCMC was informed earlier this week by ASIC that no such investigation has been undertaken, is underway, nor is proposed.

Thank you for the opportunity to make these opening remarks. My colleagues and I are happy to take any questions from the committee. Before doing so, however, may I hand up the table relating to the factual errors in submission 61?

CHAIR: Thank you for that. Would somebody like to move to receive it?

Senator O'NEILL: I move that, Chair. And if Mr Doogan is in a position to give us opening statement, that would also assist.

Mr Doogan : Yes, we can do that.

CHAIR: Thank you.

Senator KETTER: I would be interested in the document. Are there sufficient copies for us to have a look at that?

Mr Doogan : I do not know. I have just brought one.

Senator KETTER: Mr Doogan, were you present in the room when the Tasmanian Small Business Council provided its submission?

Mr Doogan : Yes, I was. But I have to confess that, as I was sitting down the back, it was a bit difficult to hear everything that was being said. If I can generalise, the matters raised, where we have corrected them, are intended so that the committee is not drawn into issues that no longer apply. For example, there are various references to the constitution. The constitution no longer applies. Many of the statements made, especially in the attachment to the submission, relate to the 2004 code which is no longer in existence.

Senator KETTER: I raised with them a matter which is probably better than I raised with you. It goes to your 2013-14 annual report. It deals with the 12-month rule, I think it was. There was a case study set out in that report on page 19.

Mr Doogan : This is about Jenny and Mark?

Senator KETTER: Yes. Can you just take us through that. What it highlighted to me was that you required permission from the ABA to investigate that matter.

Mr Doogan : From the bank.

Senator KETTER: Yes. That seems to me—

Mr Doogan : The 12-month rule, I have to say, arises quite frequently when complaints are received. When it does arise, our experience to date is that, mostly, the banks will agree to allow us to go behind the 12-month period. On occasion, they do not. This was one where they declined to. Once a bank declines to allow us to go beyond the 12-month period in the code, that is the end of the matter from our perspective. I am just reminded by Mr McGregor that, in circumstances where we have seen all of the material and the facts behind it, if we were to form a view that, indeed, the bank was being unreasonable in refusing its permission to go beyond the 12-month rule, we could, under another provision in the code, initiate an own motion inquiry.

Senator KETTER: Does that have any teeth?

Mr Doogan : It can have teeth, overall. Overall we that apply to the code—namely, an assessment of whether there has, in fact, been a breach. When I said that there were 44 breach allegations raised last financial year, I suspect that some members would have been thinking that that was not a very high number. I think there is a practical reason for that. The vast majority of people that are in dispute with a bank are usually looking for some form of compensation or have a monetary interest that they are seeking to pursue. We have no power to deal with that, so they will go to FOS or to litigation or whatever.

Senator KETTER: Of the 44, you said that 19 were determined to be—

Mr Doogan : Breaches.

Senator KETTER: Actual breaches.

Mr Doogan : Yes.

Senator KETTER: Can you give as a theme as to what type of breaches we are talking about there?

Mr Doogan : They vary. Mr McGregor, as Compliance Manager, can answer that.

Mr McGregor : As Mr Doogan stated, they vary over different types. Some are in respect of provision of credit, some are in respect of financial difficulty, some or others are around guarantees and copies of documents, where the bank has failed to provide copies of documents on request. We can arrange for a detailed breakdown of those figures to be provided to you.

Senator KETTER: Do any banks feature more prominently among those breaches than any others?

Mr McGregor : I think there is a spread by business mix—that is probably a fair result. The bigger the bank, the more often we are likely to see those. With 44 and 13 banking groups, there is not one that is predominantly more visible than the rest.

Mr Doogan : Out of the 19, five only related to credit provision. So very often, in the scheme of things they are relatively minor, such as failure to provide within a nominate five days, 14 days, whatever, or those types of things.

CHAIR: Mrs Sudmalis, are you still with us?

Mrs SUDMALIS: Yes, I am. If this is a voluntary organisation that is supposed to be, from what I gather—forgive me for putting this the wrong way—a bit of a watchdog for banks watching over themselves and yet, if they do not want an investigation to continue, they can say, 'We don't want that to continue,' I'm a little bit confused. Have I misunderstood something?

Mr Doogan : That is not correct. There is no way a bank can prevent us from undertaking an investigation once an allegation has been made. I think what you are referring to probably was the earlier discussion about the 12-month rule.

Mrs SUDMALIS: That rings a bell. How does that fit?

Mr McGregor : It means that in order for us to routinely conduct an investment, the event we are talking about has to have occurred within the last year.

Mrs SUDMALIS: Okay. So if the customer thinks the bank has done the wrong thing, they have a maximum of 12 months to notify you?

Mr Doogan : They must have known about this for 12 months. The reasoning—and the ABA would be the best organisation to ask about this because, after all, it is their code—or the rationale is that most events beyond 12 months make it difficult in some occasions to readily bring together the people or whatever the factual circumstances may be within the bank. So a period of 12 months was struck as a period that was agreed some years ago. I suspect that the 12-month rule, from the perspective of consumer groups, when the code is next reviewed, I would anticipate that, from the consumer group's perspective, they may be seeking to have that period extended.

Mrs SUDMALIS: With some of the cases that have come before us, my understanding is that the breaches were alerted prior to the 12 months, but because they were loans that were revalued they were not seen to be a breach. There seems to be a little confusion, in the perception of some, that that is seen by the consumer as being a banking breach but not necessarily by the banks themselves because generally in the fine print there is something which says, 'We're allowed to revalue your property, never mind you have been keeping up with your payments.'

Mr Doogan : Are you talking about, for example, revaluations and so on?


Mr Doogan : That is not covered by the code.

Mrs SUDMALIS: You did say that in the beginning, too, didn't you?

Mr Doogan : Yes. What I was saying was that there were no specific provisions in the code relating to revaluation of security nor impairment of loans. But there are related provisions. Firstly, a bank is required to act as a prudent and diligent banker. Secondly, a bank is obliged to try to assist customers to overcome financial difficulties—that, of course, assumes the agreement and cooperation of the customers; but, from what we have seen, it is not always forthcoming. Thirdly, a bank is obliged to provide 10 days notice to a small business customer of any change to the terms and conditions where the change will be materially adverse to the customer.

Mrs SUDMALIS: Yes, and it said it was to that particular customer.

Mr Doogan : Yes.

Mrs SUDMALIS: So if the bank made changes that might adversely affect 30 or 40 customers, would they still need to advise them or would they just run it through the system?

Mr Doogan : It is worded as 'to materially adversely affect a customer', but you can certainly have multiples of that.

Mrs SUDMALIS: Personally, I find 'obligation to be a diligent banker' and some of the other terminology to be absolutely subjective and I think that is a major cause for concern. I will leave it there for the moment.

CHAIR: Can I take you to the 44 complaints. There were 19 breaches and I think you said there were—

Mr Doogan : There were five related to credit.

CHAIR: You said the majority of breaches were minor—late documentation or some such cause. Have I read that correctly?

Mr Doogan : Yes. They spread across the code. But the code can deal with credit difficulties and so on, which are the usual major issues.

CHAIR: I get that. When, for example, people take out a loan, the code is referred to but I understand it is not provided to the majority of people. I doubt that people would come to you just because some documentation had been sent late. So I assume that the cause of their approaching you in the first place was a far worse outcome from their perspective but, as you investigated it, the only breach you found might have been late documentation. But that does not necessarily represent the circumstance that initiated the complaint. Would that be a fair understanding of the situation?

Mr Doogan : I will deal firstly with the first part of your question, which is about access to the code. That was one of the issues that we have responded to in relation to the Tasmanian small business submission. In what I have handed up, there is a listing of the number of locations to which the code is actually provided, one of which is 'every branch of every bank in the country'. In order to ensure that these are readily available to members of the public, the CCMC has its staff undertake mystery shopping expeditions: in different locations they simply walk into a branch to see whether the code is readily available—and not only in branches but on a range of websites. There are also several hundred subscribers, in various ways electronically, to information about the code. That represents consumer groups and others. Sorry, what was the last part of your question?

CHAIR: When you say there were 44 complaints and 19 breaches, and that most of those were minor, the immediate implication is that they were only minor issues. But I doubt that members of the public would take the trouble of going to the bank or going online to find a copy of the code because some documents had turned up late. I am assuming that something they viewed as far more serious and catastrophic happened, and that led to the complaint. But, when you investigated, the only breach you found was a minor breach. Is that an accurate reading of the situation?

Mr Doogan : No. That would only apply if the person complaining came to the CCMC and set forth a set of circumstances, beginning with, as you say, the difficulty with, let's say, credit with the bank, and, in a dispute with the bank, it raged on and they were denied something—a document, say. Mostly they will come very specifically with a statement that there is a breach.

CHAIR: How many of those statements would be around things like, 'We will treat you fairly and ethically'—I think they are the words that are used in the code—but end up with a finding that it was just that the documents were late, but, 'in our view, it was fair and ethical treatment'?

Mr Doogan : I think it might be useful to mention that, whilst there were only 44 allegations leading to 19 findings by the CCMC staff investigating, most of the breaches by banks are self-reported. They are getting more and more stringent systems in place throughout the banking structures to ensure that they are recording breaches of the code in their own systems. The reality is that they are doing this because they want to be regarded in a better light by the community at large. The way to do that is by improving the banking services they provide and by ensuring that they treat people correctly and so on, as reflected by the code.

CHAIR: Can I take you to the comment you made about the remarks made in evidence. You said they are no longer applicable because there is a new code that has come in since those remarks were made. Is there a material difference in the versions of the code, or is it just that it has a new name?

Mr Doogan : I might invite our compliance manager to comment on that, since he has been through both.

Mr McGregor : In many instances the obligations of the code did not change. It did introduce a considerable number of new provisions in respect of financial difficulty and how banks should deal with customers in financial difficulty, under the banner of trying to assist customers with their cooperation, to overcome their financial difficulty. Some of the guarantees provisions were tidied up. It introduced the 10-days rule for material adverse changes to terms and conditions for small business. The internal dispute resolution obligations were tidied up to reflect the ASIC regulatory guide 165 obligations as the standard by which banks should comply with the code.

CHAIR: In other words, we should not discount the previous evidence just because there is a new version. We need to go through and check what those new provisions are, and, where the others are materially the same, there may be elements of the previous evidence that are still valid.

Mr McGregor : Yes.

Mr RUDDOCK: I am somewhat troubled by the evidence. You said to us that you have been reading the submissions. I hope you have been reading all of the submissions we have received?

Mr Doogan : Yes, I have.

Mr RUDDOCK: I have never heard of you. I am a bank client. I would not know that, if I had a complaint, I could go to you. How am I apprised that you are an organisation that might be able to assist me? I have never heard of you.

Mr Doogan : Hopefully, Mr Ruddock, that is because you have not had a problem with your bank!

Mr RUDDOCK: I think the bank, these days, has a little more regard to the potential harm to them if they deal with me in ways that might be inappropriate. I do recall being very unhappy about banks quite frankly when I started off as a young member of parliament and I could not get a loan from a bank. I had to deal with insurance companies and building societies. I did not think they were terribly relevant at all. But look, aside from the fact that I may have gained some prejudices—

Mr Doogan : I might interrupt you there, Mr Ruddock, and say I was in exactly the same boat as well with my first loan.

Mr RUDDOCK: I am reasonably well informed, and I hear you have 44 issues you have looked at and I say to myself—and I know the number of complaints that we have had in the way of submissions—is this really part of the game?

Mr Doogan : Essentially, what you are saying is how do you find out about it? There is the way I mentioned: you could look at the range of publications available in your local branch and you will see this Code Of Banking Practice sitting there—

Mr RUDDOCK: I will look the next time I go.

Mr Doogan : Some of the banks have—

Mr RUDDOCK: The way my bank works these days, they do not wan you to go and visit them.

Mr Doogan : We deal closely with financial counsellors. Our emphasis in terms of consumers is predominantly in keeping up regular contact with bodies that are dealing with people in trouble. For example, the most prominent one is Financial Counselling Australia. There are approximately a thousand financial counsellors across Australia. We address and attend their conferences, we send staff out talking to consumer groups, we talk to local legal groups—legal aid groups and other community legal centres—and we distribute—

Mr RUDDOCK: I hear it, but let me just look at the nature of the submissions we are getting. We are getting them from people who have obviously not dealt with you and have not dealt with other organisations. We are going to get a lot of replies from banks and probably bankers' associations saying, 'We really don't understand the nature of this. There was a global financial crisis and a whole lot of other issues that prompted revaluations.' But these were people who were running businesses and who were experienced in running businesses that we are seeing, and a group of them effectively closed down because there were substantial revaluations of property and then immediate demands to repay. That is the nature of claims that we are getting.

Mr Doogan : Yes. I understand.

Mr RUDDOCK: I am saying to myself that if this was being done deliberately, and this is the assertion, and it occurred in relation to—let us get the figure right—somewhere in the vicinity of just about all of the commercial loans of a particular bank, it does seem out of the ordinary. I am asking myself why with organisations like ASIC, the ACCC, who we are told may have had a role—I do not think they do, but that is what we are being told—your body and the ombudsman where are all of these people able to go and get a remedy?

Mr Doogan : Where are they, and where do you want a remedy?

Mr RUDDOCK: Why are these people not able to get a remedy through the organisations that have been set up? That is what I am asking.

Mr Doogan : We can only speak about the Code Of Banking Practice.

Mr RUDDOCK: But you were telling me that the banking practice does not regulate revaluations but there are these other issues that they can look at.

Mr Doogan : Yes.

Mr RUDDOCK: And none of these people seem to have come to you.

Mr Doogan : Mainly because they are looking for a different type of remedy than we can provide. The sole remedy we can provide for an individual is to say, 'Yes, you are quite right. Bank X did breach the Code Of Banking Practice.' The reason people come to us rather than going elsewhere is usually because they want to, for example, have a technical finding of a breach of the code which might assist them in litigation or other dealings. As you know, once a bank subscribes to the code it become binding upon it. There are several cases in the last five years that make that quite clear—that it is compulsory.

CHAIR: We had evidence earlier that one of the major banks challenged the applicability of the code to their contract with the individual—I think that was in the Supreme Court of Victoria. If the general consensus is that it is binding, what would they challenge it?

Mr Doogan : You would have to ask that bank.

Senator O'NEILL: Is it because they thought they would get a better outcome that way?

Mr Doogan : Who knows? I cannot really speak for the bank. But I can, if you would like, draw your attention to three or four relatively recent cases that make this clear.

CHAIR: We are almost out of time. If you could give that to us on notice, that would be great.

Mr Doogan : All right. Just to continue on with that issue: having the Code Compliance Monitoring Committee say, 'Yes, there has been a breach of the code—in these provisions,' does not give the individual what they may typically be looking for, which is compensation. So they are going elsewhere.

Mr RUDDOCK: You cannot provide a remedy—that is what I hear.

Mr Doogan : That's right.

Mr RUDDOCK: The people who are submitting to us are saying they did not get a remedy and there is nowhere they can get a remedy. You are playing a role in relation to these matters. If you think you are going to have an ongoing role in this area, I would like you to consider how we might be able to have that enhanced with you being able to properly look at the sorts of issues that are being brought to our attention that have not been adequately addressed.

Mr Doogan : Yes. Again, the reality of all this is that the Australian Bankers Association has owned this code—

Mr RUDDOCK: You had better address these issues if they allow you to have these additional roles. You might suggest how we could have a look at it. We might make some recommendations if you have got some great ideas.

Mr Doogan : I am sure you will.

Mr RUDDOCK: I am saying to you that I think there is a problem. We are hearing from people who are saying there are a whole lot of ways in which these issues can be addressed and they really have not come to them and nothing has happened. I am saying to myself: in which direction do we go to find a way in which these issues are going to be adequately dealt with so that we do not experience it again?

Mr Doogan : I can tell you that the CCMC itself, together with the full-time staff, meets 10 times a year. We have a standing agenda item for our meetings, which is to identify any issues that have arisen in the four to six weeks between meetings which we should be making note of as potential changes to the code when next reviewed.

Senator O'NEILL: I want to clarify my understanding of where you fit. Is clause 36 of the 2013 Code of Banking Practice your foundational statement?

Mr Doogan : That is our mandate.

Senator O'NEILL: And why were you mandated into existence?

Mr Doogan : In order to independently look at this Code of Banking Practice as people complain to us that a bank has not complied with a particular provision.

Senator O'NEILL: In what way is that different from the Financial Ombudsman?

Mr Doogan : It is monetary; we have no powers to make a finding that person X ought to be recompensed to the tune of $100,000, $10 or whatever it might be.

Senator O'NEILL: So your role is simply an oversight role?

Mr Doogan : Yes, the intent of the Code Compliance Monitoring Committee is to monitor how banks are complying with the code and, in the course of undertaking things such as own-motion inquiries in particular areas, to assist the banks as an industry towards better practice.

Senator O'NEILL: What is your budget?

Mr Doogan : It is about $800,000.

Senator O'NEILL: And how many full-time officers do you have?

Mr Doogan : We do not actually have full-timers as such. The way it operates, for practical reasons, is that an agreement has been entered into with the Financial Ombudsman Service to provide housing facilities. That is by agreement. As recently as about six weeks ago, I entered into an agreement with the chief ombudsman for FOS to provide office accommodation and so on for the next two years. The reason for that is a very practical one: (a) it is cheaper and (b) there are a group of staff that deal not just with the Code of Banking Practice but also with a similar code for the Customer Owned Banking Association—so you are talking about your credit unions, building societies and mutual banks—and there are two insurance groups as well. Sally Davis here is the expert on this, having worked in more than one.

Mrs Davis : I have just begun in the role, actually, as general manager of that code compliance monitoring area. There are actually four codes that we provide secretariat services to, for the administration of the monitoring of four separate industry codes. They are the CCMC, the Customer Owned Banking Code of Practice, the Insurance Brokers Code of Practice and the General Insurance Code of Practice.

Senator O'NEILL: One of the things I think Mr Ruddock has indicated is the level of concern that we have with the volume of complaints that are coming to us, and I think you may have discussed—while I had to leave the room briefly—why you are not getting the complaints to you. How much thought have you given to the power differential? It seems to me, just as a consumer who has not had anything to do with this, that when I look at it it is all branded 'Australian Bankers' Association'. That is a pretty intimidating thing for a person who is trying to resolve or report an issue with a bank. Is it possible that the way that this is constructed and operating builds a barrier between consumers and your organisation rather than providing an easy path for them to come and say, 'Look we've got a problem here; look, we've got a problem there'? They do not have any trouble sending us information.

Mr Doogan : You cannot go beyond the fact that it is a product of the Australian Bankers' Association. It is a self-regulatory mechanism that has been created by the banks through the industry association to assist them across the board to improve their banking practices, their ethical behaviour and so on.

Senator O'NEILL: When you said 'to assist the banks' in your statement then, I think that perhaps explains why the traffic that we are getting is not coming to you. We have had descriptions from ASIC this morning and in other evidence this afternoon, and certainly in many of the materials that have been provided to the committee, of the incredible power differential for those who find themselves suddenly—by virtue of clauses that I think many people would have been completely unaware of—called to provide significant amounts of money and pay up loans at the shortest notice. I think you said in your opening statement that only 10 days is required. That is your code.

Mr Doogan : You are talking about a change of terms and conditions.

Senator O'NEILL: Yes.

Mrs Davis : That is not default. That is not 10 days to provide notice of default.

Mr Doogan : That is any—

Senator O'NEILL: So can default happen more quickly than 10 days, or is there a longer period?

Mrs Davis : No, it would be in accordance with the law.

Senator O'NEILL: That is what I am asking you, because we are hearing that people are being given as little as one or two days notice and being sold up.

Mr Doogan : I began by saying that there are no provisions that deal with the issue of loan impairment and revaluation of security, and I raised three general provisions that are related to it, being the requirement to act as a prudent and diligent banker—

Senator O'NEILL: That was clause 27.

Mr Doogan : But particularly clause 28.

Senator O'NEILL: What was clause 28? I missed clause 28.

Mr Doogan : Clause 28 is the requirement to try to assist customers, with their agreement, consent and cooperation, to overcome financial difficulties.

Mr RUDDOCK: I thought you put a time frame on it. You said they had to have 10 days.

Mr Doogan : That related to small business customers—that was clause 20—to provide at least 10 days notice—

Mr RUDDOCK: A small business builder—

Mr Doogan : of any change to the terms and conditions.

Mr RUDDOCK: Revaluation and sold up in a day!

Mr Doogan : No, but we are not talking about that. You are talking about—

Mr RUDDOCK: A small business thought he might get 10 days to try to find somebody else to get him the money so he could pay off the debt.

Mr Doogan : I think we are talking at cross-purposes here. We are talking about a 10-day requirement—

Mr RUDDOCK: I am talking about circumstances that, if put to me and if true, I think are totally unreasonable and manipulative, and you are telling me this is an issue you could have addressed, because it is a small business and there is a 10-day—

CHAIR: No, the 10-day period is for a change of terms and conditions—

Mr Doogan : Yes, a routine change of terms.

CHAIR: that apply to that single person, as opposed to more broadly. Given the time, we are going to have to draw this to a close. Thank you for your evidence. I think there are some things you have agreed to provide on notice. Can you have those to the committee by 6 November. If we have further questions we would like to ask you, we will give those to you in writing. We would certainly welcome your feedback on those and, again, we will get those to you as soon as possible so that you can make that 6 November return date.

Senator O'NEILL: I have one sentence for a reaction. If you were to be given information of a statement regarding valuations that goes along these lines, 'The bankers will be wanting quick and dirty IAs for $10,000 to $15,000 with the hope that the recommendation is to do nothing more,' what would that mean to you, Mr Doogan?

Mr Doogan : As you have read it, I have no idea.

Senator O'NEILL: I will send you that piece of information and give you a little bit more context, but it is very concerning to think that it could become a strategy to deliberately go out and revalue loans to put business with commercial loans at risk. We have information that indicates that, so I just want to share that with you today.

Mr Doogan : Yes. I will just say two things in response. One is that there are no provisions in this code that relate to revaluation of security of impairment of loans. The second is that I am getting a feel from the committee that you think that we are part of the bankers group. We are not; we are independent. But I am saying that, as an independent group of people looking on the one hand at the customer-consumer side and on the other at the banking side and coming to a decision, we can only work on the code as it is agreed by the banking industry via the Australian Bankers Association.

Senator O'NEILL: It might need to have something included about this matter.

Mr Doogan : Yes.

Mr RUDDOCK: Or, if it is inadequate, you could recommend change.

Mr Doogan : We can.

Mr RUDDOCK: We invite you to do that.

CHAIR: We will take that as a comment. The committee is now adjourned.

Committee adjourned at 16:09