The Unpleasant Truth About Australian Banking

Chapter 30 – ALARM BELLS RING LOUDER

In the Appendix of the FEMAG Report headed Matters Beyond The Scope Of This Review, it notes: the constitution constrains the Code Compliance Monitoring Committee from making public statements on their own behalf other than in the Annual Report without prior approval of both the FOS and chairs of the bank CEOs association. This could […]

Chapter 29 – ALARM BELLS RING

The FEMAG review expressed a view Compliance Monitors should be more proactive rather than reactive in making themselves available and accessible to stakeholders. To emphasise this, its report stated only a few stakeholders had any interaction with the Compliance Monitors and this interaction has been quite limited. Its October 2005 report provided recommendations for improved […]

Chapter 28 – REVIEWERS WRESTLE CONSTITUTION

In hindsight, it’s difficult to appreciate how the bank CEOs constitution might compromise aspirations of the Compliance Monitors in the early days. FEMAG was mindful of contradictions between the Code principles and the CEOs constitution however it seems neither the Compliance Monitors nor FEMAG anticipated problems undermining the Martin Committee’s high principles in 1991. These […]

Chapter 27 – HIJACKING THE CODE

Shortly after John McFarlane (ANZ) replaced David Murray (CBA), as Chair, and Gail Kelly (St George) replaced Ed O’Neal as Deputy Chair of the Bankers Association when it published the 2003 Code. The guard had changed and the restructuring period was underway, despite it being evident self-regulation relied on totally independent monitoring for effective enforcement […]

Chapter 26 – BANKS KEY COMMITMENTS

The Code is set out in six sections. The most important section for bank customers is Part B: Key Commitments and General Obligations. KEY COMMITMENTS AND GENERAL OBLIGATIONS Clause 2 sets out banks key commitments to customers and s 2.1 states what banks will do. It introduces three different cultures the banks must have wrestled […]

Chapter 25 – LIVING OUTSIDE THE LAW

As suggested earlier, a get-out used by some, if not all Code subscribing banks is to confuse the words complaint and dispute. Glancing at the Code Compliance Monitoring Committee’s annual reports its evident few complaints are ever investigated by them. It seems the banks use their own interpretation of clause 40 to stonewall complainants. PART […]

Chapter 24 – THE CODE MEANS FAIRNESS

Clause 10.3 in Code (2003) states ‘any written terms and conditions will include a statement by banks to the effect that relevant provisions of this Code apply to the banking service, but need not set out those provisions.’ On 16 October 2003, Ms Anna Dea, FOSs legal counsel, published a report titled ‘The New Code […]

Chapter 23 – WHAT’S PLAIN LANGUAGE ?

Following the Martin Committee’s report, the government proposed banks design a Code of Banking Practice setting out ‘good banking practices’. To achieve this, the banks needed to include a dispute resolution procedure that was expedient, within the financial means of customers and, above all, fair. The 1993 Code was said to be a plainly worded document […]

Chapter 22 – BANKING CODE REVIEWERS

Clause 5 of the Code sets out the commitment by subscribing banks to appoint an independent expert to review of the Code every three years. Clause 5.1 states: The subscribing banks will require the Australia Bankers Association to commission an independent and transparent review of the code every three years, or sooner if appropriate, with […]

Chapter 21 – MCFARLANE – KELLY PERIOD (2003)

During the past eight years, subscribing banks worked with parties they funded or had a relationship with to implement arrangements they could rely on to keep bad banking news for the public. An earlier chapter notes that ANZ published advice it was receiving 40,00 complaints per year, supporting a proposition one million complaints resulted in […]

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