Consumer Group Praises Bank Hardship Provisions

Post by NeilMc on September 15, 2009 · Under Australian Economy, Business News, banking · Comment

Consumer watchdog Choice has praised the introduction of hardship provisions into bank’s code of conduct, and says the measure clearly demonstrate a commitment by lenders to help customers who are enduring financial hardship.

Elissa Freeman senior policy officer with Choice says the revised Code of Banking Practice now contains 12 separate recommendations for “the ways banks should deal with financial hardship, and that’s a very positive improvement”.

“Customers will certainly have a much clearer understanding of what to expect when they are dealing with banks on this matter. In the past, banks didn’t have good processes in place to manage the issue and, to be fair, most have been working to improve that situation.” she said.

Despite lauding the changes, Ms. Freeman said there had been scant progress made on other issues, as the Australian Bankers Association delayed the implementation of any policy initiatives in favour of waiting and seeing what the Federal Government’s response would be to consumer credit and unfair contract terms.

David Bell, chief executive of the Bankers Association said the industry had “accepted the vast majority of recommendations” made by Jan McClelland in her independent review of the industry’s voluntary code, completed last December.

In her review, Ms McClelland suggested that banks should adopt a “clear commitment to responsible lending”. Ms McClelland added that such a commitment should encompass a careful assessment of applications for credit that may result in financial hardship. She also said that lenders should be more proactive in aiding customers who find themselves facing hardship.

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