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Banking Amendment (Banking Code of Conduct) Bill 2012

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2010-11-12

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

Banking Amendment (Banking Code of Conduct) Bill 2012

 

 

 

EXPLANATORY MEMORANDUM

and

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

 

 

 

 

 

 

Circulated by authority of

Andrew Wilkie MP



Banking Amendment (Banking Code of Conduct) Bill 2012

 

FINANCIAL IMPACT

 

The bill will have no financial impact.

 

NOTES ON CLAUSES

 

Clause 1: Short Title

1.     This clause is a formal provision and specifies the short title of the Bill, once enacted, as the Banking Amendment (Banking Code of Conduct) Act 2012 .

Clause 2: Commencement

2.     This clause provides for the commencement of all Sections of the Act the day the Act receives the Royal Assent

Schedule 1 - Amendments



Banking Act 1959

 

Item 1: Subsection 5(1)

1.     Item 1 inserts a definition for the “Banking Code of Conduct” into the Banking Act 1959, defining the Banking Code of Conduct as the code created by the Minister in Item 3 of the Banking Amendment (Banking Code of Conduct) Act 2012 .

Item 2: Subsection 5(1) (definition of civil penalty provision )

2.     Item 2 repeals the definition of “Civil Penalty Provision” from the Banking Act 1959 and replaces it with a definition which retains the functions of the existing definition in the Banking Act 1959 but also allows for Civil Penalty Provisions to be included in the Banking Code of Conduct. Item 2 does not repeal the note in the original definition of “Civil Penalty Provision” in the Banking Act 1959.

Item 3: At the end of Part II

3.     Item 3 creates Division 6 - The Banking Code of Conduct, and includes a number of sections:

·          36A provides for the Minister to make the Banking Code of Conduct as a legislative instrument stipulating standards that banks must comply with.

·          36B provides a mechanism by which a bank customer may complain to the Australian Prudential Regulation Authority (APRA) that a bank has failed to comply with the Code, and that APRA must investigate this complaint if it is satisfied that the bank may have failed to comply with the code, that this breach of the Code may not have been properly resolved and that the customer has taken reasonable steps to resolve the failure with the bank. APRA may choose to investigate complaints even if they are not satisfied the criteria in above criteria have been met.

·          36C provides for APRA to investigate complaints and provide the original complaint and the finding of their investigation to the bank, inviting a written response. APRA must provide the customer with the notice provided to the bank (including the findings of APRA’s investigation) as well as the bank’s response.

·          36D allows APRA to publicly name banks that they are satisfied have failed to comply with the code. APRA must notify banks in writing that they will be named and provide appropriate time for response. APRA must name banks that they are satisfied continue to fail to comply with the Code.

·          36E outlines the process of naming a bank. To name a bank, APRA must publish a notice including the business name of the bank on a website APRA manages and in newspapers available throughout Australia. The notice must include the reason for naming the bank.

·          36F provides that the Minister must not amend the Code without consulting with persons or organisations representing banks, Australian non-business banking customers, and Australian small business banking customers.

·          36G requires the Minister to review the Code at least every three years and table a copy of a report of the review in each House of Parliament within 15 days of the completion of the review.

Item 4: First making of the Code

4.     Item 4 requires the Minister to make the Code within 3 months of the commencement of this Act. The Code must include, and limit itself, to standards equivalent to those already present in the Code of Banking Practice published by the Australian Bankers’ Association as in force 1 May 2012. Standards in the Code of Banking Practice that would be impossible or impractical to assess need not be included. In deciding that a standard would be impossible or impractical to assess, the Minister must consult with APRA and persons or organisations representing banks, Australian non-business banking customers, and Australian small business banking customers.

 



STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Banking Amendment (Banking Code of Conduct) Bill 2012

 

This bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Human rights implications

 

This bill does not engage any of the applicable rights or freedoms.

 

Conclusion

 

“This bill is compatible with human rights because it does not raise any human rights issues.

 

 

Andrew Wilkie MP