Reforms revealed
(13 December 2010 – Australia) Treasurer Wayne Swan and the federal government has finally revealed its long-awaited banking reforms that will endow consumers with greater power.
For months the government has been in consultation with industry regulators and participants.
The Government has been consulting with regulators and industry on the changes, which focus on giving consumers more information and about loans and credit card deals.
Mr Swan says borrowers will be given a one-page fact sheet outlining their monthly mortgage repayments and how they can shop around for a better loan.
'A small initiative but an important initiative to empower the consumer,' Mr Swan highlighted.
Among the reforms the Australian Competition and Consumer Commission (ACCC) will now be given the power to investigate price collusion among banks.
In an effort to make bank switching easier, Mr Swan has called for a study into whether Australia could become the first country in the world to have so-called 'account number portability', where if people switch banks, all direct credits and debits would automatically move.
And in a bid to boost competition in the lending market, credit unions and building societies will for the first time be allowed to issue covered bonds.
To encourage people to use smaller lenders, up to 20 credit unions and building societies will be able to call themselves banks.
The Federal Government has also said it will extend its current program by spending another A$4 billion on residential mortgage-backed securities to help smaller lenders, taking its investment in non-bank players to A$20 billion since the global financial crisis.
Former Reserve Bank governor Bernie Fraser will conduct a study into how technology can be harnessed to make it easier for consumers to move between deposit accounts and mortgages.
The Government has been consulting with regulators and industry on the changes, which focus on giving consumers more information and about loans and credit card deals.
Mr Swan says borrowers will be given a one-page fact sheet outlining their monthly mortgage repayments and how they can shop around for a better loan.
'A small initiative but an important initiative to empower the consumer,' Mr Swan highlighted.
Among the reforms the Australian Competition and Consumer Commission (ACCC) will now be given the power to investigate price collusion among banks.
In an effort to make bank switching easier, Mr Swan has called for a study into whether Australia could become the first country in the world to have so-called 'account number portability', where if people switch banks, all direct credits and debits would automatically move.
And in a bid to boost competition in the lending market, credit unions and building societies will for the first time be allowed to issue covered bonds.
To encourage people to use smaller lenders, up to 20 credit unions and building societies will be able to call themselves banks.
The Federal Government has also said it will extend its current program by spending another A$4 billion on residential mortgage-backed securities to help smaller lenders, taking its investment in non-bank players to A$20 billion since the global financial crisis.
Former Reserve Bank governor Bernie Fraser will conduct a study into how technology can be harnessed to make it easier for consumers to move between deposit accounts and mortgages.
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