Credit Union and Building Society Codes of Conduct
For some time, the conduct of Building Societies and Credit Unions has been governed by their respective Codes of Conduct. However, that position is changing, with the Credit Union Code under review and with most Building Societies having 'opted out' of complying with the Building Society Code in light of the requirements now imposed by the Australian Financial Services licensing regime.
The conduct of Credit Unions continues to be governed by a Code of Conduct. However, following a review in December 2003, a revised Code is to be developed, which is likely to match substantially the requirements of the revised Code of Banking Practice.
The Building Society Code was developed to govern the conduct of Building Societies. However, ASIC's annual code monitoring report for the period 2002-2003 states that at that time, only eight of the 14 building societies had adopted the Building Society Code. Given all Building Societies now hold Australian Financial Services licenses, it appears that the Building Society Code is effectively redundant, as many of the matters previously dealt with in the Building Society Code are now dealt with pursuant to the licensing requirements.
Credit Union Code
The Code applies where an individual for personal, domestic or household purposes makes a deposit or obtains a loan or other facility. But it doesn't apply to a number of services, including one involving a bill of exchange, an insurance or financial planning product or service and credit without prior agreement.
The Code acknowledges privacy duties under legislation, specifically the Privacy Act 1988. The Code also expressly provides for compliance with the requirements of the Credit Reporting Code of Conduct issued by the Privacy Commissioner.
The Code allows for the disclosure of customer or member information to a Related Entity:
- as far as it is necessary to enable an assessment of the total liabilities of the customer/member to the Related Entity and the Credit Union; and
- if a Related Entity of a Credit Union provides financial services which are related or ancilliary to those provided by Credit Union, in which case disclosure can be made unless the customer/member instructs the Credit Union not to do so. Customers/members must be informed that they have the right to give this instruction. This right to opt out is not limited to disclosure for marketing purposes.
Under the code:
- Information relating to customers/members must not be collected by unlawful means.
- Customers/members must be provided on request with information about them which is readily accessible by the Credit Union and which may lawfully be provided. However, this is limited to the records of the customer's/member's address, occupation, marital status, age, sex, accounts with the Credit Union and balances and statements relating to those accounts. The Credit Union may recover reasonable costs for supplying this information.
- A customer/member may request that information held by the Credit Union be corrected. Such requests must be dealt with within a reasonable time.
- A Credit Union must not collect or use customer/member information that relates to political, social or religious beliefs or affiliations, race, ethnic origins or national origins, or sexual preferences or practices unless it does so in accordance with the Code for a proper commercial purpose. A Credit Union may disseminate such information in accordance with the Code for a proper commercial purpose.
- Credit Unions must take all reasonable steps to protect personal information held by them relating to a customer/member against loss, and against access, use, modification or disclosure that is unauthorised. The Code requires all Credit Union staff with access to personal information concerning members to maintain confidentiality concerning that information.
In addition, the Code acknowledges the general law duty of confidentiality and specifies its four exceptions.
