Australian Government

AustralianSmall Business andFamily EnterpriseOmbudsman

11 April 2019

Financial Services Reform Implementation TaskforceThe TreasuryLangton CrescentParkes ACT 2600

By email: enforceablecodes@treasury.gov.au

Dear Sir/Madam

Enforceability of financial services industry codes

Thank you for the opportunity to comment on the Enforceability of Financial Industrycodes. In short, our comments that are expanded more fully below are:

1. The 12 existing codes in the financial sector should be submitted to theAustralian Securities and Investment Commission's (ASIC) as a matter of urgency;

2. The proposed (new) Banking Code of Practice 2019 needs urgent attention to ensurethat all defective clauses are corrected;

3. ASIC must be permitted to impose mandatory codes wherever an existing code isdeficient;

4. All codes should be reviewed to ensure that they do not contain unfair contract terms(UCT) and a clause should also be in each code stating that all contractscovered by the code must comply with the UCT legislation;

5. All codes must have effective internal and external dispute resolution processes; and

6. Decisions through dispute resolution schemes or code compliance bodies must beable to be enforced.

Of the 12 codes in the financial industry, only two have been submitted to ASIC forapproval. While we the extension of the Australian Securities and InvestmentCommission's (ASIC's) power to cover all these codes, this power will remain moot until theowners of these codes seek approval from ASIC. This should be actioned as a matter ofurgency.Of the 144 Authorised Institutions (ADIs), only 23 will be covered by an ASICapproved code, namely the (new) Banking Code of Practice 2019 (the Code). However, evenin its approved form, the Code remains deficient. For example the Code provides thesignatories with numerous "get out of goal" clauses and does not require the signatories tocomply with determinations of the code's own compliance body. I attach a marked up versionof this code highlighting its various defective clauses.In respect of question 6 of the paper, to ensure ASIC's relevance, legislation must allow theimposition of mandatory codes where ASIC has identified that an existing code fails to

efficient operation of markets or protect the welfare of consumers and smallbusinesses.

T 1300 650 460 Ewww.asbfeo.ciov.au

of the Australian Small Business and Family Enterprise OmbudsmanGPO Box 1791, Canberra City ACT 2601

In respect of Question 3 of the consultation paper, in approving voluntary codes ASIC mustconsider that:

• that a code itself does not contain and the code should explicitly preventcontracts covered by it from containing UCT's;

• that signatories have an internal dispute resolution process and are members of anexternal dispute resolution (EDR) scheme; and

• that the compliance body for a code must be independent, must be able to enforcemeaningful penalties and must report all systemic issues identified to ASIC.

In respect of questions 14, 15 and 16 (how EDR schemes interact with the court system), it isacknowledged that small business does not have the resources, time, money and expertise,to pursue dispute resolution through the courts. Even working through an EDR process canleave a small business insolvent. To avoid the need to go to court wherever possible, EDRschemes must ensure that their determinations have been followed in a full and in a timelymanner. We must remove the burden from the small business to pursue non−compliance withan EDR determination through the

Thank you for the to comment. If you would like to discuss this matterplease contact Jill Lawrence on 6121 5312 or

Yours sincerely

Kate Carnell AOAustralian Small Business and Family Enterprise Ombudsman

of the Australian Small Business and Family Enterprise

The Australian BankingAssociation has theactive participationof member banksin Australia

Australian Banking Association:

Post Box H218, Australia Square NSW 1215Telephone 02 8298 0417Web ausbanking.org.au

Banking Code of PracticePublished September 2018

What is theBanking Codeof Practice?

T h e B a n k i n g Code o f Pract ice ( t h e Code) s e t s o u t t h e standardso f p rac t i ce a n d s e r v i c e in t h e Aus t ra l i an b a n k i n g i n d u s t r y fori nd i v idua l a n d s m a l l b u s i n e s s c u s t o m e r s , a n d t h e i r

T h i s v e r s i o n o f t h e C o d e t a k e s e f f e c t f r o m 1 July2019.

The Code provides safeguards andprotections not set out in the law.I t complements the law and, insome areas, sets higher standardsthan the law.

The Code was introduced in 1993.Since then, it has undergone multipleimprovements — responding toemerging issues and the changingneeds of our customers — to ensureit remains relevant.

This version of the Code has beendeveloped in close

with key stakeholdersincluding consumer groups,government, regulators and thebanking industry. I t replaces theprevious version, The Code o f BankingPractice 2013.

Over time, many o f theembedded in the Code have beenincluded in the law.

By promoting practice, the Codehas led to higher standards in thebanking and financial services

This version o f the Code has beenapproved by ASIC and ASIC receivesreports on the implementation of theCode from the Banking CodeCompliance Committee and other

Commented [Li]: Note the approval from ASIC androle the regulator holds.

The Code isunderpinnedby ourStatementof GuidingPrinciplesThese principles — shared byall member banks — providean ethical,and Theyguide us in ourwhen performing our work andserving nd theform art of the Cod

1. Trust and confidence• We are committed to earning and

retaining the trust o f customersand the community.

We are commi t ted t o making promiseskeeping them t o del iver good

customer and outcomes.

• We will comply with all laws relatingto banking services.

• We will protect your privacy.

• We recognise our role in andour impact on the wider community.

2. Integrity• We will act honestly and with

• We will be fair and responsible in ourdealings with you.

We will build and sustain a culturebased on strong ethical foundations.

3. ServiceWe will deliver high customerserviceand standards.

• We will ensure banking services areaccessible, inclusive and providedto you in a fair and ethical manner.

We will raise awareness of the basic(low, or no fee) banking productswe may offer.

• We will take a responsible approacht o lending.

• We will work to help you if you areexperiencing financial difficulty.

Transparency and accountability• We will communicate with you

in a clear and timely manner.

• We will be accountable in ourdealings with you.

We will be transparent in ourcommunications with you.

5

Commented To be clear, state that the guidingprinciples form part of the Code.

AustralianBankingAssociationBanking Codeof Practice

Setting standards o f conduct fo r banks,their staff and their representatives.

Each bank that has adopted the will complyby 1 July 2019.

I t is a condition of ABA membership that memberbanks with a retail presence in Australia arerequired to sign up to the Code. Banks that haveadopted the Code are listed on the ABA website:ausbanking.org.au/code

7

Part How t h e Code works 11

1. Who the Code applies to 12

2. Publication and review o f the Code 13

Part 2 Your banking relat ionship 14

3. Our compliance with this Code 15

4. Trained and competent staff 15

5. Protecting confidentiality 15

6. Compliance with laws 15

7. Closing a branch 15

Part 3 Opening an account and using our banking services 16

8. Providing you with information 17

9. Communication between us and you 17

10. Responding to your request for information 17

11. What information we will give you 17

12. Acquiring a new product or service 19

Part 4 Inclusive and accessible banking 20

13. Being inclusive and accessible 21

14. Taking extra care with customers who may be vulnerable 22

15. Banking services for people with a low income 22

16. Basic accounts or low or no fee accounts 23

Part 5 When you apply for a loan 24

17. A responsible approach to lending 25

18. Our approach to selling consumer credit insurance 26

19. Lenders mortgage insurance 27

Part 6 Lending to small business 28

20. Helping a small business when it applies for a loan 29

21. When will we not enforce a loan against a small business? 29

22. events o f 29

23. When we decide not to a loan 31

24. When we appoint property valuers, investigativeand insolvency practitioners 31

Part 7 Guaranteeing a loan 3225. Limiting liability under the guarantee 3326. What we will tell and give you 3327. Signing your guarantee 3528. Withdrawing or ending your guarantee 3529. Enforcing our rights under the guarantee 36

Part 8 Managing your account 3830. Keeping your accounts safe and secure 3931. Statements we will send you 3932. Cost of transaction service fees 3933. Managing a credit card 4034. Direct and recurring 4135. Joint Accounts 4136. any o f your banking services 4137. Your right to copies o f certain 4238. When we change our with you 43

Part 9 When things go wrong 4439. us if you are experiencing financial difficulty 4540. We may you i f you are experiencing 4641. We will try to help you if you are experiencing financial 4642. When you are in default 4843. When we are recovering a debt 4844. Combining your 4945. Helping with deceased estates 50

Resolving your complaint 5246. Our Customer Advocate 5347. I f you have a complaint about us 5348. How we handle your complaint 5349. Code monitoring, and sanctions 54

Acronyms 56Definitions 57Transitional period 60

CHAPTER 1Who the Code applies to

1. The Code applies to you, as defined in the table below:

"You" and "your"

"You" and "your" means a person who,at the time we provide the banking service,or information is provided, is:

a) our customer, and where relevant,a prospective customer, and is either:

i. an individual, who is not treatedas a business under the Code; or

ii. a small business; or

b) a guarantor, or a prospective guarantor.

"We", "us" and "our"

"We", "us" and "our " means the bank thatyou deal with that has signed up to the Code.

Who is a "guarantor"?

A guarantor is an individual who gives aguarantee to secure a loan that we give toanother individual or to a small business towhich Part 7 o f the Code applies.

What is a "business"?

A customer is treated as a business if theyapply for, or receive, a banking service fora purpose that is wholly or predominantly atrading or commercial purpose, and wherethe National Credit Code does not apply.

"Banking service"

Banking means any financialor provided by us in Australia to you:

a) whether supplied directly or throughan intermediary; and

b) if provided by another anddistributed by us, extends only to thedistribution or supply, and not to the

or product itself.

Examples o f banking the Codeapplies to:

bank accounts and term deposits;

• credit cards, debit cards, prepaid cards;

• home loan, personal loans, facilities,overdrafts— in the Code these areincluded in the definition

• consumer credit insurance;

• payment and

• foreign currency exchange

However, banking the Codedoes not apply to include:

• shares, bonds and other securitiesthatwe issue; and

• products and financialfor the purposes of Chapter 7 theCorporations if you are a'wholesale client' rather than a 'retail

Commented Review. Reference to theCorporations Act would mean the of smallbusiness in the following pages could not be applied.

What is a "small business"?

A business is a "small business" if at thetime it obtains the banking service all of thefollowing apply:

a) it had an annual turnover o f less than $10million in the previous financial year; and

b) it has fewer than 100 full−time equivalentemployees; and

c) it has less than million totaldebt to all credit providersincluding:

i. any undrawn amounts underexisting loans;

ii. any loan being applied for; and

iii. the debt o f all its related entitiesthat are businesses.

CHAPTER 2Publ icat ion a n d r e v i e w o f t h e Code

How the is to be publicised andmade available

4. We will promote

5. We will ensure the is available andaccessible in different ways, including inhard copy and electronically. I f you wanta copy you can ask us in a branch orover the phone and we will give or sendyou one forfree.

Three yearly reviews of the

6. The ABA will arrange for the to beindependently reviewed at least everythree years from the date thiscomes into

7. When reviewing the we will alsoconsult with consumer representatives,small business organisations and otherstakeholders

The Code forms part of our bankingand guarantees

Our written terms and conditions forall banking and guaranteesto which the Code applies will includea statement to the that the relevantprovisions o f the Code, including theStatement o f Underlying Principles, applyto the banking or guarantee.

3. The terms and conditions need not setout those provisions.

Commented [141: A simple definition, as supported byRecent Royal Commission, of any business or group

employing fewer than 100 FTEs, where the loan appliedfor is less than $5 million.

CHAPTER 3 CHAPTER 5Our compliance with the Code Protecting confidentiality

Our commitments to theCode We will protect your confidentiality

a We will honour the commitments we will meet our general duties undermake to you in Code law to protect your confidentiality.the 12. We will also have our own privacy

website.

CHAPTER 4Trained and competent staff

Our staff and representatives will betrained competent — includingabout the Code

9. We will make sure that our staff and ourrepresentatives are trained so that they:

a) can competently do theirwork; and

b) understand the Codeand how to comply withit when they areproviding bankingservices.

How our staff will engage with you10. We will engage with you in fair,

reasonable and ethical manner.

CHAPTER 6Compliance with laws

How we will comply with the law andthe Code

13. I f the Code imposes an obligationon us that is in addition to obligationsapplying under a relevant law, then wewill comply with the Code unless doingso would lead us to breach the law.

7Closing a branch

Our commitments when closinga branch

14. will comply with the ABA protocolwhen closing a branch. The protocoloutlines our commitment to providebanking to personal, and smallbusiness, customers in remote, rural andregional areas. This protocol is availableat:standards

Commented [L5]: Restate that Code includes theunderlying guiding principles.

CHAPTER 8Providing you with information

We will give you clear information

15. We will give you clear informationabout our products and services soyou can make an informed decisionabout which product or service issuitable for you.

16. We may give you advice, orrecommend that you seekadvice.

CHAPTER 9Communication betweenus and you

How we will communicate with you17. We will communicate with you in a

timely manner and we will give youinformation that is useful and clear.

Anything that we are required to giveto you under this Code may be givento you:

a) in writing, orbytelephone;

b) by telling you that the informationis available on a website or otherelectronic forum; or

c) as otherwise agreed with you.

However, if the Code specifies themethod of communication, then wewill comply with that method.

19. Where this Code requires us tocommunicate in writing, this includeselectronic communications.

20. All communication under this Code willbe consistent with our obligations underthe law or other applicable codes.

21. Our terms and conditions will bedistinguishable from our marketingmaterial.

CHAPTER 10Responding to yourrequestfor information

How we will respond to your requestfor information

22. We will answer your questions aboutour banking

23. I f you ask us for advice on any of ourbanking then we will:

a) give it to you through staff who areauthorised and trained to give youthat advice; or

b) refer you to someone else whocan provide you with advice —for example: a lawyer, accountant,financial adviser or financial counsellor.

CHAPTER 11What information we will give you

Terms and Conditions, Fees andCharges

24. I f you are entering into a for abanking with us, then we willgive you our:

a) terms and conditions;

b) fees and charges; and

c) if applicable, interest rates.

We will do this before, thecontract is made. This information maybe in separate documents.

25. The documents provided in paragraph24 will clearly set out:

a) the amount o f fees and charges andhow often they are credited ordebited to youraccount;

Commented If, after signing a Letter of Offer, theterms and conditions in final loan contract aredifferent, a small business must be given time, aminimum of 7 days, to consider changes.

b) any interest rate that applies, howand when different interest rates mayapply, the method by which interest is

calculated, and when interest will bedebited to your account;

c) how often we give you statementsof account;

d) how we may change fees, charges,interest or other terms and conditions,and how we will notify you of thesechanges;

e) for a loan, whether the loan isrepayable on demand; and

f) a statement that information oncurrent standard fees, chargesand any interest rates is availableon request.

Specific information

If the following information applies toyour banking service, we will give youthat information in, or with, our contract:

a) minimum balance requirement;

b) any restriction on depositing money,or withdrawing money, from a relevantaccount;

c) the repayment details; and

d) how we process your request to cancela debitarrangement.

Term deposits

27. Our terms and conditions for a termdeposit account will contain the followingspecific information:

a) how we will pay and repaythe principal you;

b) how funds may be dealt with atmaturity; and

c) details o f any fee, charge, or changein an rate resulting from awithdrawal in advance o f maturity.

Cheque

Our terms and conditions for an accountwith cheque access will contain thefollowing information:

a) the normal length o f t ime toclear a cheque;

b) how you may arrange for us to cleara cheque faster than normal — knownas arranging special clearance;

c) how and when a cheque may bestopped;

d) the effect o f crossing a cheque;

e) the meaning o f ' no t negotiable'and 'accoun t payee

f) the significance o f deleting the words'or bearer' from a cheque;

g) how you may write a cheque so as toreduce the risk o f it being changed inan unauthorised way; and

h) when we will not pay (known as,'dishonour') a cheque — includingif the cheque is post−dated or stale.

Exchange rates and

I f we give you a foreign exchange service(other than by credit card, debit card, ortravellers' cheque), then we will give youthe following information:

a) details o f the exchange rates andcommission charges that we knowwill apply — if we do not know thosedetails, then we will give you the detailswe know about how toout relevant information at the timeo f the transaction; and

b) an indication of when any moneyyou send overseas would normallyarrive at the destination to which youare sending it.

Insuring your property

30. I f you have a loan and we have a security(for example, a mortgage) over yourprimary place of residence or a residentialinvestment property you own, then we willremind you of your obligations to insure theproperty. We will remind you of that at leastonce a year. Our reminder will include:

a) a statement that you should checkwith your insurer about your cover; and

b) a reference to the Australian Securitiesand Investments Commission'sMoneySmart website moneysmart.gov.aufor information on property insurance.

CHAPTER 12Acquiring a new product orservice

We will ensure we have your agreementabout fees

31. I f we charge a fee for you to acquire anew product or service, then we will makesure we have your agreement to do so.

CHAPTER 13Being inclusive and accessible

We believe in inclusive banking services

32. We are committed to providing bankingservices which are inclusive o f all peopleincluding:

a) older customers;

b) people with a disability; and

c) Indigenous Australians, including inremote locations.

33. We will train our staff to treat ourdiverse and vulnerable customers withsensitivity, respect and compassion.

We are committed to providing bankingservices which are accessible

34. We are to improving theo f our banking services

for people with a and oldercustomers. We will take reasonablemeasures to enhance their accessto those services.

When providing banking toIndigenous customers

35. If you tell us you are an Indigenouscustomer, we will take reasonable stepsto make information about our banking

accessible to you. We will also:

a) tell you about any accounts andthat are relevant to you;

b) tell you about any accounts orthat have no, or low

standard fees, if our enquiriesindicate you may be eligible for theseand help you transfer to anotheraccount you want; and

c) help you meet anyrequirements.

When providing banking toremote customers

36. We will take reasonable to makeinformation about our bankingaccessible to in remotecommunities, including remoteIndigenous communities.

37. We will provide cultural awarenesstraining to staff who regularly assistcustomers in remote Indigenouscommunities.

CHAPTER 14Taking extra care with customerswho may be vulnerable

CHAPTER 15Banking services for peoplewith a low income

will take extra care with vulnerable When providing transaction bankingcustomers services to low income earnersWe are committed to taking extra care 42. I f you are an individual and you tell uswith vulnerable customers including those that you are a low income earner, we willwho are experiencing: give you:

a) impairment; a) information about our accounts thatmay be appropriate to your needs;

b) cognitive impairment; andc) elder abuse; b) information about our accounts:d) family or domestic violence; i. for which standard fees and chargese) abuse; are low; or

ii. for which there are no fees andf) mental illness;charges ( i f we offer such a

g) serious illness; or 43. Our obligation in the previous paragraph

h) any other personal, or financial, applies to you regardless o f whether ornot you are ourcircumstance causing

detriment. We may become aware i f you are a low

We may become aware of your income earner only if you tell us about it.

vulnerability only if you tell us about it. I f you receive a Commonwealth pension39. sensitivity, concession, we will give you

respect and compassion if you appear to information about our low or no feebe in a situation. accounts

40. I f you tell us about your personal orfinancial circumstance, we will work withyou to identify a suitable way for you toaccess and undertake your banking.

41. When we are providing a bankingto vulnerable customers wewill:

a) be respectful of your need for

b) try and make it easier for tocommunicate with us;

c) provide appropriate guidance andreferrals to help you to maintain, orregain, control o f your and

d) refer you to external support, ifappropriate.

44. I f you apply for a new transactionaccount, we will ask you if you have anyo f the following government cards. I f youtell us that you have one of these cards,then we will give you information aboutany banking we offer that havelow or no standard fees and charges (seeChapter 16):

a) a Commonwealth Seniors Health Card;

b) a Health Care Card;or

c) a Pensioner Concession Card.

CHAPTER 16Basic accounts or low orno fee accounts

We will raise awareness of basic, low orno fee accounts and give you informationabout them

45. We will raise awareness of ouraffordablebanking products and services such asbasic, low, or no fee accounts, includingthat you may be eligible if you have agovernment concession card.

46. We will give you information that is easilyaccessible about accounts that have low,or no, standard fees and charges.

47. We will offer you a basic, low, or nofee account i f you ask for one and wedetermine that you are eligible for one.

Training for staff about customers eligiblefor basic, low, or no, fee accounts

We will train our staff to help them torecognise a customer, or potentialcustomer that may qualify for a basic,low, or no fee account.

CHAPTER 17A responsible approachto lending

Lending to individualssmall businesses

49. I f we are considering providing youwith a new loan, or an increase in aloan limit, we will exercise the care andskill of a diligent and prudent banker.

I f you are an individual customer,that is not a business, we will do thisby complying with the law.

51. I f you are a small business, whenassessing whether you can repay theloan we will do so by considering theappropriate circumstances reasonablyknown to us about:

a) your position; or

b) your account conduct.

Where reasonable to do so, we may relyon the resources o f third parties availableto you, provided that the third party hasa connection to you (that is, to the smallbusiness). For example where the thirdparty is a related entity of yours(including but not limited to yourshareholders, trustees, beneficiaries orrelated body corporates), or is ajoint venturer, or guarantor o f yours.

52. We also owe an obligation to anyguarantor o f the loan to comply withthe above paragraph in assessing the

to repay the loan.

Lending to

I f you are an individual applying fora loan, or an increase to a loan limit,paragraphs 54 to 56 apply toyou.

54. If, on the information that you haveprovided to us in the course of applyingfor this loan, you will not receive asubstantial benefit from the loan,we will not approve you as a

unless we:

a) have taken reasonable steps toensure that you understand the risksassociated with entering into theloan, and understand the differencebetween being a anda guarantor;

b) have taken into account the reasonswhy you want to be aand

c) are satisfied that you are notexperiencing financial abuse.

55. A substantial benefit includes where:

a) you acquire a reasonablylegal or equitable

interest in assets purchased withthe loan funds; or

b) a reasonable o f the loansfunds are used to repay your debts,or other obligations owed by you.

56. You may end your under theloan by giving us a written request todo so in the following

a) where credit has not been providedor relied upon by any co− borrower; or

b) for any future advances under theloan, where we can terminate anyobligation we have to extendcredit to any otherunder the same loan.

57. Paragraphs 53 to 56 do not apply toborrowers who are companies,

of companies orin a or

arrangement.

We will tell you aboutassessment for a loan

I f we approve your loan, and it isregulated under the National ConsumerCredit Protection Ac t 2009, we will letyou know that you can obtain ourassessment about whether it is notunsuitable for you.

59. I f you are a guarantor, we will let youknow that you can also request a copyfree of charge.

We will assess your ability to repay acredit card within a five year period

When you apply for a new consumer creditcard or credit limit increase, we will assessyour ability to repay the amount o f thecredit card limit withinperiod.

Setting a credit card limit when you apply

61. You can let us know what your preferredcredit card limit is and we will not give youa limit that is more than what yourequested. Transactions may beprocessed which nevertheless causeyou to exceed your limit.

CHAPTER 18Our approach to selling consumercredit insurance (CCI)

Our to selling CCI for creditcards and loans

62. If we offer C a , then we will give you clearinformation that enables you to make aninformed decision — including (to theextent we can):

a) the cost o f the CCI, including anyinterest you will pay on the premium;

b) how long you would be insuredfor;

c) the monetary limits on the key benefitspayable under the insurance; and

d) the date your insurance ends, if thatdate is different to the date on whichthe underlying credit product ends.

63. Before we enter the with you, wewill ensure we have your express consentto acquire the

Separation o f application process forCCI for credit cards and loans sold indigital channels

64. We will refer to the availability o f C a onlyafter you have completed the digitalapplication for a credit card or loan.

65. We will you know that whether youpurchase CCI or not has no bearing onwhether we approve you for a creditcard or loan.

We will use clear disclosure for CCIon credit cards and loans to enablecustomers, as they navigate through thedigital experience, to better understandthis type of insurance. This will be through:

a) Use o f filtering so that weyou to key policy exclusions such

as age, residency and employmentstatus and if you are not eligible toclaim a significant o f the policy,not offering this

b) Disclosing the o f the policy aso f the process (the circumstances

in which a payout will be made andthe amount o f the payout).

c) Disclosing any incentives you mightreceive from taking out the

and their

d) Telling you the total cost of theinsurance (i f known) before youcomplete the CCI purchase.

e) Telling you how the premium is tobe paid.

f ) Where the ongoing premium iscalculated as a percentage or a costper dollar o f the debt orstatement balance, then we will tellyou that cost and how we calculate it.

ASIC has now stipulated aperiod.

Deferred sales period for CCI forcredit cards and personal loans soldin branches or over thephone

67. If we offer CCI for credit cards andpersonal loans through a branch orover the phone, then we will not offerthat product to you until at least fourdays after you have applied for thecredit product. This is known as a'deferred sales period'.

We can still provide factual informationon for you to consider during thedeferred sales period.

CHAPTER 19Lenders mortgage insurance

Lenders mortgage insurance contracts

We may require you to pay for lendersmortgage insurance in witha loan you have. I f we do this, we will giveyou a sheet about lenders mortgageinsurance. The sheet will containinformation outlining the key policy features.

70. We will not charge you more for lendersinsurance than the

cost we incur for that policy. We will notreceive a commission on your lendersmortgage insurance policy.

71. Depending on the terms o f the lendersinsurance if your loan

is repaid or refinanced before the endof the policy, then you may be entitled toa refund of o f the fee or charge youhave paid. We will explain this to you inthe sheet.

CHAPTER 20Helping a small businesswhen it applies for a loan

What we tell a small business when theyapply for a loan

72. We will tell a small business how to applyfor a loan, including thefollowing:

a) the information we require; and

b) after we have received the informationwe have requested, how long beforewe are likely to make a decision.

73. Before you accept a loan offer, we giveyou a plain English document clearlysetting out the key general terms andconditions of the loan. This is in addition tothe disclosures required under Part 3 o f theCode, and may be a separate documentor part of the loan document.

74. I f we decide not to approve a loan toa small business we willtell the small business the generalreason why

CHAPTER 21When will we not enforce a loanagainst a small business?

How much notice we give a smallbusiness before enforcing a loan?

75. I f you are a small business and in defaultunder your loan other than

a specific event ofmonetary default to which Chapter

give you 30 days' notice

77. We may give younotice period, nonotice period, theextent it is to do so:

on our c opinion, it

because you are insolvent, orgo into bankruptcy, administration oranother insolvency process, orenforcement action is taken againstyou by us or another credit provider;

we believe, onreasonable grounds, that you or aguarantor have not complied with thelaw or any requirement o f a statutory

is required for us to afrom that or

you a

paragraph 81.

I f you have an overdraft ordemand facility, we may not berequired to give you any noticewhen we requireif non−payment of that facility ondemand also constitutes a

underanother facility youhave with us will comply withthis Chapter in respect of thatdefault under thefacility.

CHAPTER 22

before we either require you to repay defaultsthe loan in full, or take enforcementproceedings. This chapter applies to standard form

76. I f you remedy the default during the small business loans. In this chapter,30 day period, and no default o f the 'guarantor' means any guarantor o f asame has arisen during that period, small business, not limited to a guarantorwe will not require full repayment or who is an individual.take enforcement proceedings.

Loan terms and conditions

Our loan terms and conditions willspecify how and when we will notenforce a loan against a small business

Commented Remove. is solely in favour oflender. Legitimate risks for shorter or no notice

periods are cited in the other sub clauses.

Commented fact the borrower orguarantor has not complied a law is not by itself areason for shortening the notice period. failure tocomply needs to relevantly create a need for a

notice period

Commented [L8]: 'If appropriate' is too broad. A smallbusiness needs to understand why they were not

a loan to adjust business for futureapplications for lending.

reason for not telling is breaching thelaw such as tipping off under money laundering orcriminal investigation statutes.

Commented No notice is to call ondemand facilities like an overdraft. But if borrowercannot pay on demand may be aunder a term or other facility.addition makes it clear that the borrower is stillto 30 days' notice of default under the

under facility.

Commented Chapter 22 provides for specialfor in standard form small

business loans. rules in chapter 21 do not apply tosuch

When we will not enforce a loan againsta small defaults

I f you are a small business and you havemet all payment

we will not takedefault based action against you unless:

a) you or a guarantor is insolvent,goes into bankruptcy, voluntaryadministration, other insolvencyprocess or arrangement, or nolonger has legal capacity;

b) enforcement proceedings is takenagainst you or a guarantor or youror their assets by another creditor;

c) early repayment is required under aseparate financing arrangement youor a guarantor has with us, or defaultbased action is taken against you ora guarantor by us, due to an evento f default which is described inthis chapter;

d) we believe on reasonable groundsthat a guarantorhas not complied with the law or anyrequirement o f a

non−payment of a debtto a government authority where apayment plan has been agreed withthe

or it becomes unlawful for youor us to continue with the loan;

e) you or a guarantor gives informationor makes a representation orto us which is materially ormisleading (including by omission);

f ) you use the loan for a purpose notapproved by us;

g) your or a guarantor'sare dealt with, or attempted to bedealt with in breach o f the loan, or any

or other agreement with uswithout our consent;

h) you or a guarantor do not provideinformation required by your

agreement with us;

i) you or a guarantor do not maintain alicence or permit necessary to

conduct your business;

Commented Cclarify this means paymentobligations not all terms relating to payments (e.g.notifying change of account for drawdowns) or all termsin the loan agreement.

Commented Remove as a borrower has nocontrol over agent.

Commented [L15]: Clarify entering a creditrepayment plan with ATO or other governmentauthority over a debt is not a event ofmonetary default. It becomes an event if the statutory

moves to enforcement proceedings for non−payment as captured by paragraph (b).

j ) you or a guarantor do not maintaininsurance required by youragreement with us;

k) or ownership,of a borrower

or guarantor or their businesschanges without our consent

not

I) capacity or compositionof you or a guarantor changeswithout our

What we will do before we takedefault based action

Remedying your default

We will

Give you athe grounds on

which we consider thereis a

you 30 days ayou

to remedy yourmonetary default, wherei t is able to be remedied

and notify you o f thistime period.

A reasonable time under 81will not be less than 30 daysnot apply on our

default is notremediable it is in our reasonableopinion it is necessary for us to act onshorter notice or without notice to managean immediate credit or security −risk

from the default (with a materialimpact as described in clause

Material impact

We will only act on a event ofdefault identified in

paragraph 80, if the event by itsnature is material, or wereasonably consider the event hashad, or is likely to have, a material

on:

b)a) you or your guarantor's ability tomeet your or their financial obligationsto us;

our

our legal or reputation riskwhere paragraph 80(d) or (e) and (f)applies.

General material adverse change clauses

84. We will not include a general materialadverse change clause as an event ofdefault in any standard form small businesslending

Commented Remove "management control" astoo broad as it captures a change in CEO or boardwithout a change in ownership.

Commented [L171: Remove. Insolvency and loss oflegal capacity are already covered by (a). Change of

and ownership is covered by (k). is givinglenders a blanket reason to take action.

Commented [L19]: Remove. Credit risk is already setin para (a). Clarify 'security risk' is risk that (a)security will not be enforceable and (b) will not

realize the value ascribed to it by the lender. A drop inmarket value of security which is not due to an

event in clause 80 but is due to economic conditions willnot permit default unless there is a LVR financialcovenant for specialised small business under

85.Commented is not acceptable. A

minimum of 30 days is bystandards.

small business loans

85. For the following types of small businessstandard form loans, we may includefinancial indicator covenants or specialcovenants tailored to the particular nature ofthese loans as a trigger for default basedaction:

a) loans for property development; or:

b) loans for a specialised lendingtransaction, where because o f theirnature, require additional as away o f banks managing their risks,including margin lending, loansto

superannuation funds,bailment, invoice discounting,

foreign currencyloans and tailored cash flow lending.

CHAPTER 23When we decide not to extenda loan

How much notice will we give a smallbusiness before the end of a loan

I f you are a small business and you arenot in default, and the principal owing onyour loan is not due to be fully repaid atthe end o f its scheduled term by regularperiodic repayments, we will give younotice o f our decision not to extend yourloan, at least 3 months before you needto repay your loan in full.

I f we decide to extend or yourloan, we are not required to do so on thesame terms.

CHAPTER 24When we appoint externalproperty valuers, investigativeaccountants and insolvencypractitioners

When using external property valuerswe will be fair and transparent

Our processes in relation to external expertvaluations will be fair and transparent.

Our communication will be clear and wewill explain the purpose of the valuationto the customer.

We will provide copies o f propertyvaluations and valuer instructions

9L We will only appoint appropriatelyqualified and experienced valuerswho are members of professionalorganisations which abide by a similarcode o f practice.

Appointing investigating accountantsand insolvency practitioners (includingvoluntary administrators)

We will act fairly . addresswhen using

and insolvencyincluding

by the following:

of interest appointingreceivers have been

for

for

a) kie will ensure that anyrecommendation and any decision

receivers who have beenaccountants for a

small business is and

We will only appointqualified practitioners who aremembers o f professionalorganisations with appropriatecodes of

d c ) We will require additionalinternal oversight o f the appointmento f investigating asreceivers,

review thecircumstances leading to theappointment.

I f the relationship between thebank and the investigatingaccountant has deteriorated (for

Commented 11201: I f the borrower has paid forvaluation, the valuation and instructions should bemade available. If the valuation is disputed in theenforcement action it is presumably discoverableanyway.

Commented must be a positive duty toensure recommendations the lender toappoint and to appoint are free of conflicts of

para (c) means that allproposals to appoint receivers and recommendations asto who to appoint (including by investigatingaccountants) must be carefully including forconflict of interest.

e x a m p l e has b e c o m e unworkable)t h e b a n k wi l l cons ider thea p p o i n t m e n t o f a n alternativequal i f ied practitioner.

CHAPTER 24ANotification o f referral o f loan forcredit assessment ormanagement

93. I f we determine tha t your loan will bereferred for a credit

or restructurina wil lnoti fy you in wi th in 7 days ou rreasons and the likely outcomes o f t ha t

Commented Small business borrowers must bemade aware when loan facility moves from'ordinary' bank to banks 'credit management' or'restructuring' area.

notice must outline.likely consequences•details of the person to contact (as will havechanged)

without making further advances.When this part applies

I f you are an individual who givesa guarantee and/or indemnity tosecure a loan that we give to anotherindividual or small business, and thisCode applies to the loan, then thiso f the Code applies to your guaranteeand/or indemnity.

CHAPTER 25L i m i t i n g undert h e guarantee

Before accepting a guarantee

Your guarantee will be limitedto:

− a amount and/or categoryo f amounts such as all amountsowing under a loan, plusother liabilities and amounts as

in t h e guarantee ( fo r example,interest and recovery costs); or

the value o f a property orother under amortgage or other at thetime of

During the guarantee

You may write to us to limit, or furtherlimit the liabilities you have guaranteedunder your guarantee. However, we donot have to accept your request if:

a) the amount, or nature, o f thelimit you request does notcover the borrower's existing

(plus anyowed, or any fees, or chargesthat we may incur in respectof that under therelevant loan contract at thetime;

b) we are obliged to makefurther advances tothe borrower; or

we would be unable to preservethe current value o f an asset which

d)c) is security for the loan

CHAPTER 26What we will tell and give youBefore accepting a guarantee

Notice to youThe terms and conditions of theguarantee will contain a prominentnotice that:

a) you should seek independent legaland financial advice;

b) you can refuse to sign the guarantee;

c) there are financial risks involved;

d) you can limit your liability inaccordance with this Code or asallowed by law;

e) you can request information aboutthe transaction or loan; and

f) if applicable, that the guaranteemay cover future credit facilities andvariations of the loan.

will tell you:

a) about any notice of demand wehave made on the borrower for theguaranteed loan, or any loan theborrower has (or has had) with us,within the previous two years; and

b) if any existing loan we have giventhe borrower will be cancelled i f theguarantee is not provided.

This paragraph does not apply ifyou are a commercial assetguarantor, sole director guarantor ortrustee guarantor.

Required warning notice

will ensure that a warning noticeappears directly above the place whereyou sign the guarantee. The warningnotice will be substantially in the formrequired by section 55 of the NationalCredit Code, and detailed in Form 8 of

t ionalConsumerCredi t ProtectionRegulations 2010 and consistent withthis Code.

Guarantee documents

will give you a copy o f the followingdocuments in relation to the borrower:

a) the proposed loan contract;

b) a list of any related security contracts;

c) any related credit report from a creditreporting body;

d) any current insurancecontract that is in our possession;

e) any financial or statementof financial position the borrower hasgiven us in the previous two years forthe purposes o f the guaranteed loan;

f ) the latest statement o f accountrelating to the loan for a period inwhich a notice o f demand wasmade by us; and

g) other information we have about theguaranteed loan that you reasonablyrequest — but we do not have to giveyou our internal opinions.

This paragraph does not apply if you area commercial asset financing guarantor,sole guarantor or guarantor.

What we will tell you if you are adirector guarantor

you are a guarantor (other thana sole guarantor) we will tell youthat you have the right to receive thedocuments in paragraphs 96 to 99, andthat these containinformation that may your decisionto give a guarantee. You may choose notto receive some or all o f theand we will not influence your choice.

During the guarantee

We give you the followinginformation, about a borrower'sdeteriorating financial position as itrelates to the loan you guarantee, within14 days' o f therelevant event:

a) a copy o f any formal demand ordefault notice we send to the borrowerafter we send it;

b) a written notice if the borrower hasadvised us that they are experiencing

which has resultedin a change to their loan; and

c) a written notice if the borrower isin continuing default for more thantwo months the issuance o f thedefault notice referred to above.

102 I f you ask us to, we will give you additionalcopies of any information we have givenyou — we will do so within days.

103. However, we do not need give youthose copies if we have given youthe information you withinthree months before your

Paragraphs 102 and 103, do not applyif you are a commercial asset financingguarantor, sole guarantor ortrustee guarantor.

Extending your guarantee

104. I f a borrower obtains a new loan or haschanges made to an existing loan, thenthese may be covered by your guaranteeto the extent they fall within the limitcontained in your guarantee.

105. I f we agree to increase the limit in yourguarantee, we will:

a) give you what is required underparagraph 99; and

b) obtain your written acceptance ofthe o f the guarantee.

106. In these circumstances, we willprovide you with any noticeof demand made by us on the borrowerin respect o f the loan.

CHAPTER 27Signing your guarantee

When we can accept your guarantee

107. We will not accept a guarantee from youuntil the third day after you have beengiven the information provided atparagraph 96 99.

108. However, we can accept the guaranteeearlier if you:

a) have obtained independent legaladvice about the guarantee;

b) have accepted an extension o f theguarantee;

c) are a commercial asset financingguarantor, sole guarantor,

guarantor or vehicle assetguarantor; or

d) you are a guarantor andyou choose to sign and deliver theguarantee earlier. We will not influenceyour choice.

Signing your guarantee

109. We will give the guarantee documentsdirectly to you or your representative.We will not give the guarantee documentsto the borrower, or to someone onbehalf o f the borrower, to arrange for youto signthe guarantee.

110. I f we the signing of the guarantee,we will ensure that you sign the Guaranteein the absence of the borrower. This doesnot apply if you are a commercial asset

guarantor, sole directorguarantor or trustee guarantor.

Paragraphs 109 and do not apply ifyou are a commercial assetguarantor, sole guarantor or

guarantor.

CHAPTER 28Withdrawing or endingyour guarantee

Withdrawing your guarantee

111. You may, by notice to us,withdraw from the guarantees:

a) at any time before we providecredit under the relevant loan; or

b) credit is first provided, if thesigned version o f the relevant loandiffers in a material from theproposed loan we gave you beforeyou signed the Guarantee. This doesnot apply to any change to the loandescribed in paragraph 104.

However, you may do so only tothe o f the obligations underthe guarantee.

Ending your guarantee

112. You may end your liability under aguarantee you have given to us by:

a) paying us the lower of:

i. the borrower's outstandingincluding any future or contingentliability; or

ii. the amount to which your guaranteeo f the borrower's is limitedunder the guarantee; or

b) making other arrangements we agreeto in return for releasing you from yourguarantee.

b) if one (or more) of the followinghas occurred:

i. we have obtained Court judgmentin our favour against the borrower forpayment of the guaranteedand the judgment debt remainsunpaid for at least 30 days ourwritten demand for its payment;

ii. we have made reasonable attemptsto locate the borrower but withoutsuccess; or

iii. the borrower insolvent.

115. However, the restrictions under paragraphs113 and 114 do:

a) apply if the borrower is a smallCHAPTER 29 business;[

Enforcing our rights under b) not apply i f you have specificallythe guarantee agreed in writing after the default

notice is issued and we have informedHow we will enforce our rights under you o f the limitations of our enforcementthe guarantee under this chapter that they do

not apply; or113. We will not enforce any or otheryou have given us in c) not require us to enforce any

with the guarantee unless we have or other security thatenforced any or other the borrower has provided if wethat the borrower has provided for the reasonably that the proceedsguaranteed This paragraph does o f that enforcement will not benot apply where the guaranteed sufficient to repay a substantialarises under a marginloan. o f the guaranteed liability.

114. We will not enforce any judgment againstyou under the guarantee unless:

a) we have first enforced anyor other security that the borrower hasprovided for the guaranteedand

Commented Remove. Guarantors and providersof security for loans to a small business are theowners of the business or family members. It isnot reasonable why owner guarantors andguarantors should be exposed to enforcement against

before bank has enforced any mortgage orother security provided by borrower (clause 113) orobtained and sought to enforce judgment against theborrower 114) noting that lender does nothave to pursue likely fruitless action againstborrower's security under 115(c).

CHAPTER 30Keeping your accounts safeand secureWe will tell you about safeguardingimportant items

116. We will tell you to safeguard yourpayment documents, cards and devices.

We will tell you when you should tell usif any o f those items are lost or misused

117. Our terms and conditions set outwhen you should tell us if any paymentdocuments, cards or devices are lostor misused.

118. We will tell you about:

a) how you can notify us o f the loss,theft or misuse; and

b) the consequences o f you not tellingus about the loss, theft or misuse.

CHAPTER 31Statements we will send youWhen will we give you statementsfor your deposit account?

119. At least every six months — or morefrequently if you we will give you anaccount statement for a deposit account(unless it is a passbook account).

When will we give you statements if youare in default on your loan account?

120. I f you are in default on your loan account,then we will give you a statement ofaccount or alternative (for example,transaction if you ask for it.

What if the Credit Code'sstatement rules do not apply to yourloan or credit account?

121. I f you are a small business or an individualand the rules in the Nationalabout o f account do notapply to your loan or credit account,then we will give you a of

on your account as thoughthose rules did apply.

122. However, we do not have to do that ifthe nature of the relevant banking servicemeans it is impractical for us to do so.

CHAPTER 32Cost of transaction service fees

We will tell you the cost ofservice fees

123. I f you are an individual, we will tellyou about a service feeimmediately before you incur the fee, if itis practical and reasonable for us to do so.

124. However, it may not be orreasonable for us to do so in

— forexample:

a) dishonour fees;

b) if the fee is charged based onbalance and, therefore, is not

necessarily incurred at the time o f thetransaction — for example, anoverdrawn fee based on end of daybalance;

c) if you are making an online purchase:from a third party, using a merchantterminal, or using another bank'sATM, or

d) break which may be incurred ifyour transaction makes aprepayment to a rate loan.

CHAPTER 33Managing a credit card

We will pay off your higher interestcredit card debtsfirst

125. Any payment you make to your consumercredit card will be applied to theamounts that have the highest interestrate as at the last statement date.However, if you ask us to, we may agreeto apply a repayment against adebt owed.

interest retrospectively onportion of credit card balance that ispaid off by the due date

126. I f you have an period on aconsumer credit card balance, or partof a balance, for a period of time, we willnot retrospectively charge you forthat period because you didn't pay off thatbalance, or o f that balance,by the due date.

We will give you notice before anintroductory balance transfer offer ends

127. I f you have an introductory balancetransfer offer on your consumer credit card,we will give you at 30 days' noticebefore it is due to end.

You may ask us to reduce your creditcard limit

128. I f you ask us to reduce your existingconsumer credit card limit, we will enableyou to do this online or by contacting us.This will be subject to anyfeatures that apply (for example, wherethe product requires a minimum limit).

You will still be required to first repayany amount above the new limit.

card limit increases

129. We will not offer to increase your consumercredit limit on your existing credit card otherthan in response to a request by you for theincrease in your credit limit.

You can ask us to dispute a transactionon your credit or debit card account

130. If, within the time limit set by yourcredit card or debit card scheme rules,you tell us that you dispute aon your card, then we:

a) will claim the relevant amount back ifwe it be incorrectly charged andyou have not contributed to the loss; or

b) may accept the merchant's refusalto make that chargeback only if therefusal is made in a way allowed underthe relevant card's scheme rules.

131. You have the under the aboveparagraph even if the payment wasdebited from your credit card or debitcard account and was part o f a recurringpayment arrangement you have with thatmerchant.

132. You may also have a right to disputean unauthorised transaction under theePayments or as contained in yourterms and conditions.

133. We will make general information aboutdisputed transactions available to youand notify you of the availability of thisinformation at least once every 12 months.

CHAPTER 34Direct debits andrecurring payments

We will give you a list of your direct debitsand recurring payments

134. I f you ask us to, we will give you a list ofdirect debits and recurring paymentson your accounts for up to the previous13 months. The list will include only thosedirect debits and recurring paymentsthat are known to us from the informationwe receive about your transactions.

The regular payments from your:

a) deposit account are called 'directdebits'. This is where you have givenyour deposit account details (BSB andaccount number) to allow a merchantor service provider to debit your accountregularly to pay for the services theyprovide you.

b) credit card account are called'recurring This is where youhave given your credit or debit carddetails (card number, expiry date andsecurity code) to allow a merchant orservice provider to charge your creditcard regularly to pay for the servicesthey provide you.

What we will do when you ask to cancela direct debit o r advise us of a problemwith a directdebit

135. You can ask us to cancel your debitand we will promptly process this.

136. You can ask us to anunauthorised debit and we will

promptly to assist you.

137. When we handle your cancellation orcomplaint, we will not inform you thatyou should raise the cancellation orcomplaint with the merchant youpay through the debit. However,we may suggest that you alsothat merchant.

CHAPTER 35Joint Accounts

How to use a jo in t account

138. I f you have a joint account, we will tellyou how you can use thataccount.

How you can stop withdrawals

139. I f you have a joint account, from whicheither you or another account holder canmake withdrawals, you can ask us tochange the account so that youall have to approve any future withdrawals.This may be relevant to you if you arevulnerable (see chapter 14).

140. The above paragraph does not apply too f a company who are signatories

on behalf o f the company, rather than jointaccount holders in their personal

CHAPTER 36Closing any o f yourbanking services

We will give you informationabout closing your accounts

141. We will give you readily accessibleinformation about how to closeyour account.

You may close your accounts

142. I f you want to close your account, then wewill enable you to do this quickly and easily.Some products may have a minimumnotice period.

We may close an account that is in credit

143. We may close an account o f yours underterms and conditions if that account is incredit. I f we do so, we:

a) will, if appropriate, give you reasonablenotice of the closure;

b) will pay you the amount of the creditbalance; and

c) may charge you an amount that isour reasonable estimate of costsof closing youraccount.

We will tell you if we cancel yourcredit card

144. I f we cancel your credit card we will tellyou. I f appropriate, then we will give youthe general reasons for doing so.

You can ask us to cancel your consumercredit card

145. I f you want to cancel your consumercredit card, then we will provide theability for you to do this online or over thephone. I f you ask us to, we will give youinformation about recurring paymentsand your outstanding balance.

CHAPTER 37Your right to copies ofcertain documents

We will give you certain documentsyou ask for

146. We will, at your give you a copy ofyour in our possession including:

a) a contract — including terms andconditions, standard fees and chargesand interestrates;

b) any or other securitydocument;

c) a statement o f account; and

d) any notice we previously gave toyou which is relevant to us exercisingour rights.

147. However, we do not have to give you acopy o f either o f the followingunder the above paragraph:

a) a notice requiring you to take ifyou ask for the copy more thanyears after the to which thenotice relates was discharged orended; or

b) a statement o f account within threemonths after we gave you a copy ofthe same of account.

When we will give you the documentsyou ask for

148. I f we are giving you a copy o f a documentunder the above paragraph, then we willdo so within 30 days.

We may waive or refund fees forproviding you with a copy o f adocument o r statement

149. We may charge you a reasonable fee forproviding you with a copy o f a documentunder this Code. However, in

we may waive or refundthat fee.

150. We may charge you a fee for hard copythat are not repeat

I f you tell us, and we are reasonablythat you do not have access to

then we will waiveor refund thatfee.

CHAPTER 38When we change ourarrangements with youWhen we can change the terms ofconditions of our banking services

151. terms and conditions of a bankingservice may allow us to change thoseterms and conditions in certain situationswithout your agreement.[

155. We may give you a notice period,or no notice, of an unfavourable change if:

a) believe doing so is necessary forus to avoid, or to reduce, a materialincrease in our credit risk or our

When we tell you about a change to theterms o f conditions o f our banking services

152. I f we change our terms and conditions,we will tell you about the change as soonas reasonably possible. This includes achange to:

a) our standard fees and charges; or

b) an interest rate.

153. I f we change an interest rate, we will tellyou no later than the date of the change,unless we are not able to because theinterest rate is calculated according to amoney market or some other externalreference rate, or a rate otherwisedesignated as a variable or floating rate.

154. Apart from changes to interest rates, i f webelieve a change is unfavourable to you,then we will give you prior notice o f atleast 30 days, subject to paragraph 155.

b) there is a change to, or introductiono f a government charge that youpay or as ofyour banking In that case, wewill tell you about the introduction or

thegovernment us (however, wedo not have to tell you about if thegovernment publicises theor change).

we will tell you about changesto our arrangements with you?

156. We will tell you aboutthesechanges either:

a) by in the national,or local, media; or

b) by giving you written notice.

Commented Remove. Solely in favour of thelender.

Commented Code must list types ofchanges that could be made under unilateral variationclauses to specific categories.

clause creates a significant imbalance because thesmall business was not afforded corresponding rightto terminate or obtain a change in scope or scale of theservice.At least 30 days notice is required as it is a reasonableperiod for the customer to be able to repay and exit theloan if do not wish to accept the notified change.

CHAPTER 39Contact us if you areexperiencing financial difficulty

What does "financial difficulty" mean?

157. Financial difficulty means you areunable to repay what you owe andare experiencing difficulty meetingyour repayment obligations. This can beas a result o f an unexpected event orunforeseen changes outside your control.

We encourage you to contact us if youare experiencing financial difficulty

158. I f you are experiencing financial difficulty,then you, or your representative shouldcontact us as soon as possible. We willdiscuss your situation and the optionsavailable to help you. The sooner you

us, the sooner we can try to help.

I f you have a jo int account and areexperiencing financial difficulty

159. I f you have a joint account with someoneand you are experiencing financialdifficulty, then we can assist you. I f youask us to, we can do so without involvingthe other person initially.

I f you guarantee a debt to us andare experiencing financial difficulty

160. I f you are a guarantor and we havemade a demand for you to pay undera guarantee and you are experiencingfinancial then us assoon as possible and we will discussyour options.

Be open about your situation offinancial difficulty

161. When you us, or are thinkingabout us, it is important foryou to be open, and as realistic as youcan be, about your financial position. Inturn, we will be compassionate into understand your situation and whendiscussing any way we can help.

You can choose to have us deal withyourfinancial counsellor or representative

162. I f we are working with you to help yourespond to financial difficulties, thenyoucan tell us to deal with yourcounsellor or representative — ratherthan dealing with you. To do this, youwill need to give us their detailsin writing.

163. However, if we have made reasonableattempts to or deal with, yourcounsellor or representative but we areunsuccessful, then we will deal withyou again.

We will respond promptly to you oryour representative

164. We will respond promptly to you — or yourrepresentative's — request to discuss your

difficulties. Our reply will be withinthe timeframes set by the National CreditCode, if it applies.

CHAPTER 40

We may contact you if you areexperiencing financial difficulty

We may contact you if we think youare experiencing difficulty

165. We will employ a range o f practices thatcan identify common indicators o f financialdifficulty. I f we identify that you may beexperiencing paying what youowe under a loan (or are experiencing

difficulty), then we may contactyou to discuss your situation and the optionsavailable to help you. We will do this on a

basis.

166. I f we are able to you and discussyour situation under paragraph 165 andwe offer basic bank accounts, and you areeligible, we will offer this to you.

CHAPTER 41We will try to help you if you areexperiencing financial difficulty

We will work with you to help you respondto difficulty

167. With your co−operation, we will work withyou to help you a sustainable solutionto your financial difficulties. Any help wecan give will depend on your individualcircumstances. We provide help tocustomers on a basis.

We will give you information aboutour financial difficulty processes

168. We will make information publiclyavailable about our processes for workingwith customers in financial

What we will consider when decidingon assistance options

169. When we are deciding whether, and how,to help you with we willtake into account the information availableto us, including information you give usabout your financialsituation.

Examples of how we may help you ifyou are experiencing financial difficulty

170. The table on page 47 out examples ofwe may be able to take to help you

in particular situations.

When we may waive your debt

171. In exceptional circumstances, we maylook normal processes to away to assist you if you are experiencinglong term hardship as a result of amaterial change in circumstances.

172. I f you are an individual, we may, at ourdiscretion, reduce or waive your debt ifi t is an unsecured personal loan or creditcard, on a case by case basis and oncompassionate grounds, having regardto the following:

a) your individual circumstances;

b) if you are unable to meet yourrepayments now and in the future;

c) whether the hardship is genuine andbeing caused by outside yourcontrol; and

d) our commercial considerations.

We will tell you about the relevantCredit Code provisions if they

apply

173. We will tell you about the hardshipprovisions of the Codeif they apply to you.

How we may be able to help

Restoring your financial position is possible

Our financial hardship arrangements focus situations from which you can recover yourfinancial position.

these situations, we may be able to help you by:

• agreeing to interest only payments for a short period;

• extendina the term of your loan to reduce your repayments; or

• temporarily postponing or deferring payments.

These may require you to pay more interest over the loan term.

W h a t y o u c a n do

In these circumstances, contact us and we will help you work out what you need to do.

Restoring your financial position is unlikely

A permanent change to your financial situation may mean it is now unlikely that yourfinancial position can be recovered even if your existing loan were to be changed.

In that case, it may not be appropriate, for us to offer you changes to any paymentarrangements under the hardship process.

However, even in these circumstances, we may be able to offer you help —for example, options may include:

• agreeing on an alternative arrangement, plan or contract;

• changing the terms of yourloan;

• giving you t ime to sell your property; or

givino information about bankruptcy or insolvency arrangements.

W h a t y o u can do

In these circumstances, contact us and we will help you work out what you need to do.

174. We will tell you about your right to makea complaint to our external disputeresolution provider i f we do not assistyou under the National Credit Code.

We will not require you to accessyour superannuation

175. We will not require you to access yoursuperannuation to pay any amountyou owe us under a loan (unless youare borrowing forsuperannuation fund). However, you maywish to discuss this option with a financialcounsellor. You can also out moreabout this from the Department o f HumanServices, see

Other people who can assist you

176. I f you ask us to, we will refer you tocounselling organisations that

may be able to help you. We may alsorecommend on our own.initiative thatyou seek independent advice from afinancial counsellor.

We will tell you about our decisionin writing

177. We will tell you in writing:

a) whether we will provide you with help inrelation to your financial difficulty; and

b) the reasons for our decision.

178. I f we agree to provide you with help in theform of changes to your agreement with us,then we will tell you in writing about themain details of the arrangements, including:

a) the repayments you need to makeunder the proposed new arrangement;

b) what will happen at the end of thenew arrangement; and

c) whether you accepting the proposednew arrangement will have any adverseconsequences in relation to banking

or your credit history (forexample, an entry in your credit orcancellation o f a banking

This does not apply to minor individualinstances of help we provide — for example:deferrals, refunds or fee waivers.

CHAP 42When you are in default

We will tell you if we your defaultactivity to a credit body

179. We will tell you if we any paymentdefault of yours under your loan to a credit

body. You can also independentlyobtain a copy o f your directly from acredit body.

CHAPTER 43When we are recovering a debt

We will comply with debtcollection guidelines

180. We will comply with the ACCC's andCollection Guideline: forCollectors

and Creditors.

181. We will comply with the Code ofOperation: Recovery o f Debts fromDepartment o f Human Income

Payments or ofAffairs

182. I f we sell a debt to another we willonly choose a party that has agreed tocomply with theseguidelines.

What we will tell you if we sell yourdebt to another party and we will notbe your contact

183. I f we sell your debt to another party, andyou will be obliged to pay the debt to thatother party, and we will no longer be yourcontact, we will write to you to let you knowand explain:

a) that we have sold your debt; and

b) who we have sold itto.

We will not sell debt when we areWhen we cannot combine your accounts

considering your financial situation 187. I f you have an account that relates to any

184. While either of the following is the case,amounts you owe us under a loan that is

we will not sell your debt to anyone else if: regulated by the National Credit Code,then we may not combine that account

a) we are actively considering your in any of the following circumstances:situation: a) while we are considering your

i. under paragraph 167; or situation under either:

ii. under the hardship variation i. paragraph 167 o f this Code; orprovisions of the Nat ional Credit

ii. the hardship provisions of theCode; or National Credit Code; or

CHAPTER 44Combining yourWe will inform you if we combine o r set−offyour accounts

186. I f we combine or set−off yourincluding using available funds in one ofyour accounts to repay a debt you oweus, then we will promptly inform you wehave done so.

b) you are complying with an arrangementthat you and we agreed to after we

b) while you are complying with an

completed any considerations o f the arrangement you have made with uswe have considered yourreferred to in this paragraph.

situation; or185. However, we may transfer your debt in

either of those circumstances if the transfer: c) if doing so breaches Code ofOperation: from

a) is of a funding arrangement — of Human Servicesfor example, a securitisation or the Income Support Payments orissue of covered bonds or similar of Veterans' Affairsfunding arrangements; or Payments.

b) is of a sale of business or business 188. I f we are considering your financialrestructure. situation in either of the ways referred

to in the above paragraph, then we mayrequire that you keep funds in an accountuntil we have decided whether to agreeto your request.

CHAPTER 45Helping with deceased estates

Deceased's representatives

189. We will provide clear and accessibleinformation on what you, the deceased'srepresentative, can do to manage acustomer's account in the event o f theirdeath. This information will include:

a) who has authority to access thecustomer's account or loan details;

b) what information we need to verifythe identity and authority of thatperson; and

c) the person authorisedneeds to take to manage thedeceased customer's accounts.

190. We will act on instructions concerninga deceased's account from a personnamed in a grant o f probate or letters of

within 14 days o f receivingthe necessary information.

191. Prior to probate or letters of administrationbeing granted, if we receive afrom a person authorised by a will or aperson who has applied for ofadministration, and on providing a copyof the death certificate, we will, within14 days of receiving theinformation:

a) provide access to information aboutthe deceased's account; and

b) receive payment towards a debtowed to us by the deceased.

Joint accounts

192. I f you are a joint account holder with adeceased customer, you may continue tooperate the account subject to the termsand conditions o f the account.

CHAPTER 46Our Customer Advocate

We will have a Customer Advocate inour bank

193. We will have a Customer Advocate inour bank to help facilitate fair customeroutcomes and minimise the likelihood offuture problems.

The Australian Banking Association's GuidingPrinciples for Customer Advocates areavailable at:

CHAPTER 47

I f you have a complaint about us

You can access free internal andexternal dispute resolution processes

194. I f you have a complaint, contact us in theinstance

I f we are unable to resolve your complaintto your satisfaction, we will give youinformation on how you can take yourcomplaint to our external disputeresolution

and

Both our internal dispute resolutionprocess and external dispute resolutionprovider will comply with ASIC guidelines.

We will publicise our dispute resolutionprocesses

We will publish, and make readilyavailable, information about our internaldispute processes and our

dispute resolution provider

a) our branches;

b) our telephone banking services; and

c) our websites or other digital platforms.

Farm debt mediation

Before we enter into a farmdebt mediation with you, we willinform you that you may have aright, as an alternative to farm debtmediation, to make a complaint toour dispute resolutionprovider.

I f we do not reach anagreement at a farm debt mediationand you then decide to make acomplaint to our external disputeresolution provider,we will give our consent for thedispute resolution provider to considerthe complaint. This paragraph onlyapplies where your complaint wouldhave been excluded by ourdispute resolution provider because ithad previously been the subject o f afarm debt mediation.

CHAPTERHow we handle your complaint

We will be fair and reasonable and willkeep you informed

We will ensure our process forhandling your complaint is fair andreasonable.

We will keep youinformed of the progress o f your

201.202. We will give you the name of aperson who is handling your

complaint and a way to them.

Responding to your complaint

When we have completedour investigation, we will provideyou a written response, which willinclude:

a) the outcome of our investigation ofyour complaint;

b) your right to take your complaint toour dispute resolutionprovider; and

c) the name and details of ourexternal dispute resolution provider.

Commented [L261: As is now only one externaldispute resolution service, identify them here itscontact details.

Timeframes for handling yourcomplaint

203.204. I f we resolve your complaint toyour satisfaction within five business days,we do not need to provide you with awritten response as outlined in paragraph203, unless you ask us. This does notapplyto a complaint relating to hardship,a declined insurance claim or thevalue o f an insurance claim.

I f we are unable to resolve your complaintwithin 21 days, we

thc

a) tell you the reasons for the delay;

b) tell you the date by which you canreasonably expect to hear theoutcome of our investigation; and

c) give you monthly updates onthe progress; and

d) provide you with the name and contactdetails of our external dispute resolutionproviders.

However, we do not havemonthly

if you have notresponded to requests for additionalinformation from us and that is

your

CHAPTER 49Code monitoring, complaintsand sanctions

Code complaints, monitoringand sanctions

We have established anindependent code monitoring body,the Banking Code Compliance

(BCCC), monitorourcompliance with this Code.

Members of BCCC

The independent BCCC,established under this Code, is comprised ofthe following members:

a) an independent chairperson −appointed jointly by theFinancial Authority (AFCA)and the ABA; and

appointedby consumer representatives on theBoard o f AFCA; and

a) a banking representative − appointedby the ABA.

The BCCC unanimously willappoint, on terms it thinks appropriate,a person or a panel o f persons, withexpertise in small business and/oragribusiness to as a consultant onsmall business and agribusiness issues. Theconsultant will provide advice on smallbusiness/agribusiness whererequested by the BCCC.

You can contact the BCCC abouta breach o f this Code

I f you want to an allegedbreach o f this Code you can contact theBCCC.

207.209. I f you have a specific disputewith your bank that involves a breach ofthis Code, you should your bankin the instance, and then your bank's

dispute resolution provider.

Powers and role of the BCCC

In relation to the Code, theBCCC has the following powers:

a) monitor and oversee compliance withthe Code;

b) investigate any allegation of a Codebreach noting its pursuant to its

c) as appropriate, investigate serious orsystemic breaches;

Commented Remove. simply provides alender with extra time before the small business canescalate dispute.

first action of AFCA is to refer a complaint back thelender automatically providing lender a further 30days.

d) request information from subscribingbanks and other stakeholders;

e) make and recommendationson Code breaches;

f) apply sanctions;

g) provide guidance and reports; and

h) undertake other functions andresponsibilities as reasonablydetermined from time to time.

In addition, the BCCC will endeavour to:

a) drive improvements in compliance withthe Code, to achieve bestthrough a collaborative approach withthe bankingand other key stakeholders; and

b) promote awareness o f the Codeand the role of the BCCC throughengagement with key stakeholders.

When the BCCC is itsinvestigation function it will prioritiseits on monitoring and publicassurance. Prioritising investigativewill have regard to factors such as: numberof customers severity o f breachand public interest.

BCCC resources

202211. The ABA will ensure that theBCCC has sufficient resources and fundingto carry out its functions. More informationon the BCCC is available in its onthe BCCC website.

We will comply with the BCCC

We will co−operate and complywith o f theBCCC in the performance o f itsmonitoring and

BCCC Powers and Sanctions

The BCCC has the power toapply to a Code subscriber fora breach o f this Code where ahas been made that:

a) the breach is serious or systemic;

b) the bank has failed to act on BCCC'srequest to remedy a breach, or failedto do so within a reasonable time;

c) there has been a breach of angiven to the BCCC;

the bank has not taken adequateto prevent a serious or

breach from

of theBCCC the of its

and investioative

The BCCC may impose one ormore after considering theseriousness of the breach.available to the BCCC are:

a) requiring the bank to ortakeaction on the breach

b) requiring a bank to acompliance review of our remediationactions;

c) formally warning a bank;

d) requiring a bank to atraining program on the Code;

naming a bank in the BCCC annualor

the finds there areserious or ongoing

instances where a bank has been non−the BCCC

ASIC.

Commented 1129]: Permit the BCCC to take actionwhere a lender has not complied under clause 212.

Commented Remove. Lenders should not beable to delay or thwart BCCC investigations because thebank asserts requests are unreasonable.

Acronyms

ABA The incorporated entity named Australian Banking Associationor by an approved change of name

ACCC Australian Competition and Consumer Commission

AFCA Australian Financial Complaints Authority

ASIC Australian Securities and Investments Commission

ATM Automatic teller machines

BCCC Banking Code Compliance Committee

BSB Bank State Branch

NCC National Credit Code

Definitions

' the Code' The 2018 Banking Code o f as published atthe commencement date.

Asset finance Financial accommodation provided by us:

Australia

Bank

(a) for the acquisition, lease, rental, hire purchase orotherwise of a tangible asset that is not land; and/or

(b) to fund the payment of any insurance products acquiredin connection with that asset.

Includes the coastal sea o f each jurisdiction but does notinclude an external territory.

Means a corporation authorised by law to carry on thegeneral business o f banking in Australia and that is authorised

the Banking A c t 1959 to use the or a similarexpression in its name.

Card scheme Mastercard, Visa, American Express, Union Pay or Diners Club.

Commencement date The date that we subscribe to the Banking Code of

Commercial assetfinancing

Commercial assetfinancing guarantor

Asset finance provided by us to a business.

A guarantor that a shareholder or manager o f acompany, that has provided a guarantee for the company'scommercial assetfinancing.

Complaint An expression of dissatisfaction made to us in relationto a banking service, or the complaints handling processitself, where a response or resolution is explicitly orimplicitly expected.

Consumer credit Insurance that provides cover if you can ' t meet theinsurance repayments on your loan because you lose your job,

you are sick or injured, or you die.

Days

Default

Default based action

Device

Director guarantor

Calendar days.

You are 'in default' i f you fail to meet any o f the terms andconditions of thecontract.

Exercising a legal or contractual right as a result o f anevent o f default.

A device given by us to you that is used to perform atransaction. Examples include, ATM card, debit card or creditcard, contactless device.

A guarantor o f a loan who is a o f a company which isto be the debtor for the loan.

Dispute Has the same meaning as complaint.

Eftpos

Enforcementproceedings

Proprietary or domestic debit cards managed by eftposAustralia.

For a small business:

a) commencing proceedings in a court to recover a debtor to recover possession o f property to security; or

b) otherwise enforcing security by taking possession(or seeking to take) o f security property, exercisinga power of sale over security property, appointingreceivers or receivers and managers, appointing

administrators, or making application toa for the appointment o f provisional liquidatorsor the appointment o f a in bankruptcy; or

c) enforcing a judgment against you, a guarantor,or your or their

Loan The credit or accommodation provided to you underthe banking service, including, but not limited to, credit facility,credit contract, loan facility, home loan, personal loans, billfacilities, overdrafts, commercial asset

Merchant A provider of goods and services.

National Credit Code Means the National Credit Code set out in Schedule 1 of theNational Consumer Credit Protection Act 2009.

Related entity As defined in 9 of the Corporations Act 2001 (Cth).

Security Includes, without mortgage o f and a securitymeaning Securities

Act 2009.

Sole directorguarantor A guarantor o f a loan who is a of a company that hasonly one and that company is to be the debtor forthe loan.

Standard fees and Fees and charges normally charged by us in of acharges banking

Terms and conditions Terms and conditions applied by us to a bankingbut does not include any other terms and conditions

that may apply by operation o f law.

Trustee guarantor

Unauthorisedtransaction

A guarantor o f a loan where the guarantor and the debtor arethe same person, and that person is as trustee of a trustin one of these roles and is in their personal inthe other role.

A that is not authorised by you.

Vehicle asset financing Asset provided by us to an individual that is not abusiness, in relation to a motor vehicle and/or any relatedinsurance products.

Vehicle asset finance A guarantor who has provided a guarantee for the vehicleguarantor asset finance o f an individual that is not a business.

Transitional periodFor the purpose of this section the transition date means:

• 1 July 2019; or• for member banks adopting the Code prior to 1 July 2019, the day on which the

ABA has published on its website the member bank's subscription to this Code.

Application to Banking Services

This Code will apply to every bankingservice for which you enter into anagreement with us on or after thetransition date.

Application to GuaranteesThis Code will apply to every Guaranteewhich you enter into on or after thetransition date.

For Guarantees that you entered intoFor ongoing banking services that we before the transition date or wherewere providing you as at the transition documentation was sent to you beforedate or where documentation was sent to the transition date:you before the transition date:

a) the terms and conditions o f thata) the terms and conditions o f that Guarantee need not comply with

banking service need not comply this Code, and will continue to applywith this Code, and will continue to even if they are inconsistent with thisapply even i f they are inconsistent Code. I f we provide you with revisedwith this Code. I f we provide you terms and conditions the transitionwith revised terms and date, those revised terms andthe transition date, those revised terms conditions will comply with this Code;and conditions will comply with thisCode; b) if the transition date we ask you to

increase the limit of your Guarantee,b) this Code applies where it relates to we will comply with the relevant

matters that are not specifically dealt provisions of thisCode;with in the terms and conditions o f thatbanking service; c) this Code applies where it relates to

matters that are not dealtc) this Code does not affect things we with in the terms and conditions o f that

did in relation to that banking service Guarantee;before the transition date. I f ourbanking service arrangements with d) this Code does not affect things

you as at the transition date complied we did in relation to the Guaranteebefore the transition date. I f ourwith the 2013 Code, they will continue

to comply with this Code even if this Guarantee with youaCode would have required something s at the transition date complied

to be done differently. with the 2013 Code, they will continueto comply with this Code even i f thisCode would have required somethingto be done differently.

2 0 1 3 Code

The 2013 Code will not apply to anybanking or Guarantee to theextent that this Code applies.