The Customer Owned Banking Association has said that consumers already have strong protection under the code of practice (COBCOP) that are, in fact, stronger than the ABA code.
An Independent review of the ABA code found that a number of COBCOP protections were stronger than the ABA code, including clearer modern language around responsible lending, more sympathetic language and default fees.
COBA chief executive Michael Lawrence said that he was glad ABA had updated their code to be in line with standards his customers had enjoyed for years.
“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,” he said.
Mr Lawrence said that COBCOP had already planned a review for early next year and that the ABA code would be considered.
“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,” he said.
According to Roy Morgan Research, the customer owned banking sector always ranks higher than banks on measures of trust and loyalty.
“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,” Mr Lawrence said.
Mr Lawrence said COBA made mistakes but at least their customers knew who they worked for.
“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,” he said.
