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The economy
24 March 2011

NO.025

Joint Media Release
with
The Hon Bill Shorten MP
Assistant Treasurer
Minister for Financial Services and Superannuation

Bank Reform Legislation Introduced Into Parliament

The Gillard Government has taken further steps in our broad agenda to promote a competitive and sustainable banking system that delivers a better deal for households and small businesses.

Today I introduced legislation to Parliament to give Australians a fairer go with their credit cards.

Credit cards are integral to many family budgets so we must ensure every dollar of a borrower’s hard-earned repayments work hard for them.

The credit card reforms include:

  • Requiring credit card lenders to allocate repayments to higher interest debts first
  • Preventing lenders from charging over-limit fees unless consumers specifically agree that their account can go over the limit
  • Banning ‘tick a box’ unsolicited credit offers unless the consumer has agreed to receive them
  • Requiring lenders to tell consumers the implications of only making minimum repayments.

I also introduced legislation today to prevent price signalling by banks designed to undermine competition and push interest rates higher.

The ACCC has advised there’s strong evidence that banks have been signalling increases in mortgage rates to their competitors.

Obviously the big banks won’t welcome tougher regulation, but we’re going to give the ACCC the powers it needs to protect the interests of Australian consumers.

These reforms are part of our Competitive and Sustainable Banking System package designed to empower consumers to get a better deal, assist smaller lenders put more competitive pressure on the big banks, and to secure a sustainable flow of credit to households and businesses.

24 March 2011