Strong protection for consumers under COBCOP

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Customer Owned Banking Code of Practice 

South west Credit Union notes public statements by the Australian Banking Association (ABA) that the ABA’s new Banking Code of Practice should be adopted by mutual banks, credit unions and building societies that are not ABA members.

Consumers need to be aware that they already have strong protection under the Customer Owned Banking Code of Practice (COBCOP) which South West Credit Union subscribes to.

The Independent Review of the ABA code noted a number of provisions where consumer protections under the COBCOP were stronger than the current ABA Code, including:

  • clearer, modern language around responsible lending
  • reverse mortgage protections
  • complying with the Department of Human Services Code of Operation
  • protections for guarantors
  • more sympathetic language for customers experiencing financial difficulties, and
  • default fees.

“We are really pleased that the ABA’s new Code has stepped up to keep pace with the standards customers of credit unions, building societies and mutual banks have enjoyed for years,” said South West Credit Union’s CEO David Brown.

“This call by the ABA is somewhat gratuitous given that the COBCOP was always scheduled for review early next year, before the new ABA code commences. We will take the new ABA code into account in that review.

“It is ironic that the major banks are lecturing credit unions and building societies about consumer protection.

“While we welcome constructive engagement with our listed bank peers, customer owned banking institutions object to any suggestion that their record of putting customers first is somehow inferior to the track record of the major banks.

“The success of our model is demonstrated by our sector’s consistently superior performance on measures of trust and loyalty.

“The customer owned banking sector’s performance on the Roy Morgan Research Net Promoter Score scale is in a completely different ballpark from the major banks.

“The major banks are at minus 6 compared to the customer owned sector at plus 26, a trend that has remained consistently the case for the last two years.

“We are profit-making but not profit-maximising. We are not trying to squeeze our customers to please shareholders. We are not perfect but we are not conflicted about who we are working for.”
 

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