Page 4649 - Week 15 - Wednesday, 15 December 1993
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travelling around Australia, you call on your Liberal counterparts in those Liberal State governments who are responsible for consumer affairs and credit laws, because your commonsense on the problems with the banking sector and the inadequacy of some of the existing safeguards and protections was music to my ears. It is what I have been saying for the last three years to those same Liberal politicians. They, for some reason, do not seem to accept it when it comes from me because they regard us as some sort of socialist ogre. Perhaps when they hear it from you, Mr Westende, they might realise that there is indeed a need for tougher control of banks.
I am disappointed that we have seen further weakening of the proposed uniform credit Bill. I think that that will not do anything to increase public confidence in the banks. I am also disappointed, and I have expressed my disappointment to my Federal counterpart, the Treasurer, that the proposed banking code of conduct is a weaker document than it should be. There are some particularly poor shortcomings in that proposed document. There is a proposal that it apply only to new accounts. The Australian Bankers Association has persuaded the Federal Government that the code of conduct apply only to new accounts. That is a really weak provision because it means that it may be years before you can come under the protection. True it is that you can change accounts to get protection under the code of practice, but the Australian Bankers Association have thought of that. They have preserved the ability to charge fees for changing accounts. So it will cost you if you want to get under the code.
The provisions in relation to guarantors are extraordinarily weak, and the concern that Mr Westende raised about people not knowing what they have done when they have signed to be a guarantor is significant. There is one crucial issue that I have urged both the Australian Bankers Association and the Commonwealth Government to adopt. A bank makes the decision to require a guarantor only when it has information that suggests to it that there is a risk. I and the national consumers movement have been urging that, if the bank knows of a risk, when the bank is approaching the guarantor the bank should say to the guarantor, "We want your guarantee because of this risk". That would seem to be a fair thing to do. I cannot understand why there is resistance from the banks on that.
In relation to confidentiality, there is an extraordinary provision in the banking code of conduct which says that the banks are entitled to collect information about a customer's political, social and religious beliefs and affiliations, their race, ethnic and national origins, and sexual preferences or practices, for proper commercial purposes. The banks say, "We really want that because there is a product which is very popular in San Francisco now being marketed by the banks, a gay card rather than a MasterCard or a Visa card". It is a gay card and you can get your discount as well as the banking product. They say, "Well, it is appropriate and we may want to collect that sort of information". I have said that I do not think they should collect the information. I have said, "If you collect the information the customer should have a right to check the information that is held against them".
But no; the code gives them the right to collect this broad range of information but gives to the customer only the right to check information relating to their address, occupation, marital status, age, sex and account number. So the bank may hold on its computer that a particular person is a member of a political group that is a well-known urban terrorist group and also engages in whatever
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