A new Banking Code of Practice has been developed and sent to ASIC for approval. The new Code will also be scrutinised by the Royal Commission for the purpose of determining whether or not the industry code is adequate to protect individual consumer and small business rights.
The new Code was rewritten following an independent review into the old Code by Philip Khoury. Mr Khoury criticised the old Code for being too legalistic and a “complex tapestry of obligations”.
The new Code encompasses ten key sections, with 4 of those sections being brand new. The focus is on improved transparency and making banking easier for individuals and small businesses. An example of a major change aimed at increasing transparency is the banning of unsolicited credit card limit increase offers. Guarantors also benefit from the revised Code with a 3-day cooling off period being introduced before a guarantee can be signed by a prospective guarantor who has not obtained independent legal advice.