Professor Gail Pearson, the consumer representatives on the Mutuals Code Compliance Committee, reports on developments with the Mutual Banking Code of Practice and the compliance activities of the committee.
The Mutual Banking Code of Practice (the Code) is a voluntary Code of Practice which sets standards of good industry practice for subscribing credit unions, mutual banks and mutual building societies (Mutuals). The Code is being administered by the Code Compliance Committee (CCC) as an independent compliance monitoring body using three strategic focus areas: Monitoring, Investigating and Engaging.
Annual Report 2011/2012
In December 2012, the CCC issued its third Annual Report which outlines the CCC’s key monitoring activities during the reporting year 1 July 2011 to 30 June 2012. Through its work undertaken over the past three years, the Committee achieved an increased awareness of compliance with Code obligations amongst Mutuals and a better understanding of the necessity to establish effective Code compliance frameworks.
From a consumer perspective, the report highlighted the need:
- to assist Mutuals to assess their own effectiveness in staff training and the application of Code obligations in practice, and particularly in transition to the revised Code which is currently being finalised;
- to develop guidelines and samples for effective reporting and monitoring of Code breaches, in particular in regards to
- Code compliance management;
- Code breach identification;
- Code breach reporting; and
- Code breach management; and
- to review Code obligations for Mutuals when dealing with members with special needs, in particular regarding responsible lending and financial difficulty guidelines.
The Committee emphasized these particular issues with the independent Code reviewer Cameronralph Navigator. It is looking forward to working with all stakeholders on the outcome of the review to ensure that consumer’s needs are adequately addressed and considered.
Compliance activities during the 2012/2013 period
The 2012/2013 period was a busy year of evolution and change in the sector. The Code, which is now four years old, has been reviewed and is about to be finalised.
Furthermore, the Committee welcomed a new Chairperson, Dr Sue-Anne Wallace in May 2013.
Dr Wallace (BPharm, BA (Hons), PhD, Grad Cert Mgt, Adv Dip Arts, FAICD) has an extensive career in the not-for-profit sector, most recently as executive with the Vincent Fairfax Family Foundation. Over the past decade Sue-Anne has engaged with industry codes and self-regulation nationally and internationally. She is currently inaugural Chair of the Alliance, a national body for community arts and cultural development, and director of the Blake Society, the Power Foundation University of Sydney and the Nutcote Trust.
Compliance acitivities in the 2012/2013 period included:
- two group visits to discuss Code compliance issues in Sydney (NSW) and Orange (NSW);
- presentations as part of Abacus Roadshow on Code compliance matters in Sydney (NSW), Melbourne (Vic), Adelaide (SA) and Brisbane (Qld);
- participation at the Abacus Convention in Brisbane (Qld);
- eight onsite visits of individual Mutuals;
- 16 audits of Mutuals regarding clarification of their Code compliance obligations;
- participation at the Financial Counselling Australia (FCA) Conference in Melbourne;
- presentation at two Financial Consumer Rights Council (FCRC) Professional Development Days;
- presentation at the Consumer Action Law Centre (CALC); and
- publication of three reports (Follow up ‘Direct Debit Report’, ‘Code Training Report’ and ‘2012 Annual Report’) and four industry bulletins (see Accomplish at the CCC website), all of which are published on the CCC website www.cccmutuals.org.au .
In total, 75 per cent of the Mutual Code subscribers had one or more personal contacts with the Code Administrator to discuss and assess Code obligations.
Compliance workplan for the 2013/2014 period
The Committee recently approved its Annual workplan for the 2013/2014 period. It included the continuation of effective partnerships with industry and its stakeholders. In particular, the workplan for the 2013/2014 period focuses on the following compliance monitoring activities:
- the 2013 Annual Compliance Statement (ACS), used to collect and assess information regarding general Code compliance and breach and complaints monitoring and reporting;
- an Own Motion Inquiry regarding compliance with section D 24 of the Code to review procedures and guidelines concerning financial difficulty; and
- providing guidance to Mutuals on matters related to Code compliance when transitioning to the revised Code.
As such, the Committee will continue to assist Mutuals to position the sector as the most customer orientated of the financial services industry.
Professor Gail Pearson
Contact the Code Compliance Committee
PO Box 14240
Melbourne City Mail Centre
Melbourne Vic 8001
Phone 1300 78 08 08