Examining Customer Owned Banking Institutions’ compliance with section 24 of the Customer Owned Banking Code of Practice: “If you are in financial difficulty”

This inquiry examined whether customer owned banking institutions are meeting their obligations to help their customers in financial difficulty. We found that

  • Code Subscribers are willing to work with their customers to help them with their financial difficulties.
  • Most are meeting their training commitments and monitoring compliance with their Code obligations.
  • More than two thirds of financial counsellors agreed that on balance Code Subscribers’ financial hardship arrangements sometimes result in fair, reasonable and appropriate outcomes for their clients.

We recommended that Code Subscribers review their processes to ensure that the individual circumstances of all customers in financial difficulty are considered and that repayment arrangements are tailored to meet the individual’s situation.


The Customer Owned Banking Code Compliance Committee (the Committee) has recently conducted an inquiry into whether customer owned banking institutions (Institutions) have met their financial difficulty obligations set out under section 24 of the Customer Owned Banking Code of Practice (the Code). The inquiry comprised of three stages – a review of information about financial difficulty on participating Institution’s websites, a scenario based survey undertaken with 30 Institutions and a survey of 52 financial counsellors and community lawyers to understand their experiences of the financial difficulty services provided by Institutions.

Overall, the Committee found participating Institutions were genuinely willing to work with their customers to assist them when in financial difficulty. There was, however, broad interpretation and inconsistent application of Code obligations across those Institutions surveyed which may create a spectrum of conduct and behaviour, if this result is indicative of broader practice.

80% of financial counsellors experience a standard solution to their clients and 30% of financial counsellors have experienced an Institution list a default on their customer’s credit file and/or sell a debt whilst a financial hardship request was being considered.

The Committee will address the issues with the Customer Owned Banking Association (COBA) and provide the industry with guidance in regards to good industry practice for compliance with financial difficulty obligations under the Code.

The Committee will also publish a fact sheet which will provide guidance to consumers on what to expect from Institution when you are in financial difficulty.