For the CCMC the year 2008 – 2009 can be succinctly characterised by the word ‘change’. It saw the departure of Chairperson Anthony Blunn AO, CEO Kirsten Trott, former CEO Barbara Schade and Committee member David Tennant, and the arrival of new CEO Damian Paull and Committee member Nicola Howell.
In addition to the operational activities of the Committee, it was a year that saw the completion of two major exercises: a review of the activities of the CCMC and a review of the Code of Banking Practice.
The former review, conducted by R.T. Viney, concludes that the CCMC:
- Has developed effective relationships with stakeholders.
- Has implemented effective compliance monitoring activities and techniques.
- Has put in place fair and transparent procedures for dealing with alleged breaches.
- Has adequate systems for the collection, recording and processing of information of the code.
- Has lent credibility to the Code as a self-regulatory scheme.
The review of the Code of Banking Practice was completed in December 2008 and the recommendations will have a significant impact on the Code and the role of the CCMC.
Perhaps the most significant recommendation for the CCMC, is the proposal for the CCMC “to be established as a separate independent unit within the FOS reporting directly to and accountable to the FOS Board for the performance of its prescribed functions under the Code” (recommendation 9)”.
The integration will enable us to avoid duplication of roles, while enabling customers to understand precisely how and where they can complain. Simply expressed, there will be one telephone number and one process.
Once this new structure is implemented, the CCMC will become even more pro-active, with an increased ability to anticipate potential areas of concern. We will expand the role of mystery and shadow shopping. Forums and workshops will also help us to understand the needs and expectations of customers. It is our hope that the recommendations will be implemented by the end of 2009.
Other significant proposals in the Code Review Report include recommendations to:
- Include a clear commitment to “responsible lending”, including a commitment to carefully assess applications for credit that may result in financial hardship;
- Encourage banks to take a more proactive approach in identifying and helping customers facing financial difficulties at the earliest possible opportunity;
- Require the full disclosure of “exception fees” by the banks, and that they provide information to customers on how to avoid such fees, which normally apply for overdrawn accounts;
- Formally recognise the role of financial counsellors in managing cases of financial hardship;
- Include a new clause relating to Indigenous customers, including Indigenous cultural and community awareness training for staff operating in indigenous communities;
- Clarify the roles of the Code Compliance Monitoring Committee and the Financial Ombudsman Service in relation to Code compliance monitoring and dispute resolution respectively; and
- Adopt a broader definition of “commercial asset financing guarantor” to include directors, owners or managers in certain circumstances. This is a significant recommendation relating to guarantees as it resolves an issue where the Committee has previously named Westpac (Annual Report 2007-2008) for non compliance.