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APRA consultation on zero and negative interest rates
20 August 2021
Given the uncertainties arising from the COVID-19 pandemic and the related economic impacts, the ABA understands the importance of ensuring systemic stability and preparedness of members for a range of risks, including a zero or negative cash rate. The ABA considers the timing of the development of solutions by 30 April 2022 may be insufficient given the impact that these solutions would have to ADI core banking systems, processes and potential amendments to product terms and conditions.
Download PDFBank Capital Reforms: Update
20 August 2021
We support a revised capital framework that strengthens the financial resilience of the industry, embeds unquestionably strong levels of capital and also provides for greater flexibility in periods of stress. We recommend that APRA: • replace the parallel run with targeted quantitative impact surveys (QIS) • delay the implementation of the standardised approach for foundation and advanced internal ratings based (FIRB and AIRB) authorised deposit-taking institutions (ADIs) • reduce the regulatory reporting burden on ADIs for March 2023, and • delay the implementation of new Pillar 3 changes to 2024.
Download PDFAnti-hawking: Update to RG 38
18 August 2021
In the ABA’s view, the guidance detailed throughout RG38 provides clarity over the forms of communication subject to the prohibition, the nature and scope of a consumer’s consent. However, the guide does not adequately consider the types of interactions between customers and frontline staff. These interactions vary greatly and, in many cases, involve a frontline staff member needing to gain an understanding of a customer’s needs to educate them on the scope of products.
Download PDFCompensation Scheme of Last Resort
13 August 2021 Private
The ABA is supportive of establishing a forward-looking CSLR that is industry-funded, operated by the Australian Financial Complaints Authority (AFCA), is initially limited to personal advice failures and is scalable, and has design features consistent with the recommendations of the Ramsay review. However, we harbour serious reservations concerning the design of the scheme as proposed.
Download PDFCompensation Scheme of Last Resort
13 August 2021 Private
The Australian Banking Association (ABA), Australian Finance Industry Association (AFIA), Insurance Council of Australia (ICA) and Customer Owned Banking Association (COBA) jointly express our concerns over the exposure draft legislation published by Treasury on the Compensation Scheme of Last Resort (CSLR).
Download PDF2021 Credit Reporting Code consultation
11 August 2021
The ABA provides the following recommendations and observations: 1. Promises to pay vs. financial hardship arrangements: We are concerned that ARCA’s proposal to define financial hardship arrangements (FHAs) is overly prescriptive and conflicts with elements of the National Consumer Credit Protection Act 2009 (NCCP). 2. Backdating the start of a financial hardship arrangement: The ABA does not support the approach allowing backdating of a financial hardship arrangement. 3. Payment test & catch-up periods: The ABA is supportive of the proposal for a payment test period or catch-up period to be treated as a financial hardship arrangement where the arrangement immediately follows, and is in response to, an earlier financial hardship arrangement. 4. Treatment of joint accounts where abuse is present: We are supportive of the interim proposal that ARCA has proposed to take extra care of customers experiencing family and domestic violence (FDV).
Download PDFDeferred Sales Model Exemptions
9 August 2021
The ABA supports the Government’s proposed regulations to exempt insurance products from the deferred sales model that provide high value and are well understood by consumers. This provides a more targeted approach to add-on insurance products subject to the deferred sales model and will address consumer harms and poor value identified by the Royal Commission without affecting the availability and accessibility of high value insurance products. However, the ABA considers there is further room to refine the proposed regulations in relation to business insurance.
Download PDFLoans impacted by COVID-19: APRA regulatory support
6 August 2021
The ABA considers that the part and full repayment moratoriums, offered as part of the ABA 2021 national support package, aligns with the regulatory approach provided for in draft Attachment E to assist banks in supporting customers through this period.
Download PDFBanking Code Review (2021)
6 August 2021
The ABA is planning to strengthen the small business section in this version of the Code by expanding the definition and increasing the number of small businesses able to access covenant light contracts from their bank
Download PDFConsumer Data Right rules amendments (version 3)
30 July 2021 Private
Whilst the ABA fully supports the growth of the CDR, we are deeply concerned that Treasury’s proposals are unjustifiably detrimental to consumer choice, a consumer’s control over their data and privacy, data security and most importantly weaken consumer protections
Download PDFConsultation on CPG 229 – Climate Change Financial Risks
30 July 2021 Private
The ABA supports APRA’s approach in draft CPG 229. The understanding of climate-related risks is nascent and disparate. As the management of climate-related risk matures it is important that early guidance remains flexible to enable the development of those processes. Therefore, the ABA supports principles-based guidance which incorporates the following in its design: • International alignment – A globally consistent view will be important to reduce work effort and complexity for banks that are subject to the requirements of different jurisdictions. • Collaborative exploration between the regulator and industry –The ABA has valued the collaborative approach that APRA has taken with the Climate Vulnerability Assessment (CVA). Continued collaboration will be important to build capability in the banking industry. • Flexibility of guidance – Flexible guidance allows each APRA regulated entity to configure its approach dependent on business objectives.
Download PDFABA InfoSec Standards – Position Paper
23 July 2021
Incorporating responses to Data Standards Body consultation: Decision Proposals 182. Ensuring that the appropriate technical standards for information security are put in place to enable the CDR is vital. These technical standards need to accommodate both an extension in scope for open banking, as well as setting the template for expansion of the CDR to other sectors of the economy. This paper makes the following recommendations: 1. Adopt FAPI 2.0 for future best practice 2. Ensure and Preserve Interoperability
Download PDFCPG 511 Remuneration
23 July 2021 Private
Over the past four years the industry has worked to align remuneration frameworks with customer centric and risk culture, proactively as well as in response to independent and regulatory reviews.
Download PDFABA response to DP-183
23 July 2021
The proposed solution put forward in DP-183 refers to a principle of ‘Purpose-based consent’. Purpose Based Consents are a way to encode all of the required dimensions and granularity for a specific use case. Unfortunately, this specificity leads to a consequent loss in flexibility. DP-183 highlights read-only use cases which are not currently covered; however, the same principles and requirements are even stronger to enable read-write access.
Download PDFShared responsibility in drought support
21 July 2021
Banks in Australia have a strong history of helping agri-business customers through difficult times. Banks provide a range of services to help farming customers experiencing not only the effects of drought but also natural disasters or other circumstances outside their control. The ABA welcomes the Government’s continued support regarding the existing provisions of in-drought support measures.
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