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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